The New South Wales (NSW) Court of Appeal recently considered the insurance and indemnity provisions of a labour hire contract. What caused the dispute was the fact that one set of insurance provisions was contained in the Standard Conditions of the contract, and another was in the expressly described ‘lower priority’ Site Regulations attached to the contract.  

The Standard Conditions required the labour hire company to have certain insurances and to indemnify the principal in the event of a liability not caused by the negligence of the principal. However, the Site Regulations required the labour hire company to name the principal as an interested party on the liability policy to cover the principal’s liability to other interested parties and third parties. The latter requirement would clearly cover the principal for its own negligence. The insurer argued that the latter requirement be read down to achieve consistency with the insurance and indemnity provisions contained in the Standard Conditions. It also argued that the requirement to insure the principal for its own negligence was improbable.

The NSW Court of Appeal unanimously found there was no inconsistency, finding the Site Regulations insurance provisions supplemented the provisions in the Standard Conditions. That is, the Site Regulations did more than merely support the indemnity afforded by the Standard Conditions. The Court also rejected the insurer’s improbability argument.

Click here to read the judgment.