On 10 October 2007, the sellers exchanged written contracts with the buyers for the sale of a building, with the risk of loss being imposed upon the buyers.

On 27 October 2007, before completion, a serious fire broke out and the property was damaged. The buyers paid the full purchase price and recovered an indemnity from their insurers under a policy which provided “If when you claim there is other insurance covering the same accident, illness, damage or liability, we will only pay our share.” The buyers’ insurers claimed contribution from the sellers’ insurers, the sellers having a policy which covered both sellers and buyers subject to the proviso that “We will not pay any claim if any loss, damage or liability covered under this insurance is also covered wholly or in part under any other insurance except in respect of any excess beyond the amount which would have been covered under such other insurance had this insurance not been effected.”

Gavin Kealey QC ruled that the buyers’ insurers had no claim. The “rateable proportion” clause was overridden by the “excess” clause. The buyers’ policy did not exclude liability to the buyers in the event that there was some other insurance in place, and the only relevant provision was a rateable proportion clause which restricted liability in the case of double insurance. However, there was no double insurance by reason of the excess clause.

For further information on this case see the Bailii website.