Insurers Mandated to Fulfill Obligations Post Mine Collapse

5

Insurance companies have been directed to complete their responsibilities in restoring a critical piece of mine equipment that collapsed following initial repairs. This ruling comes after a legal contention over their payout duties.

Insurance providers Vero, QBE, and Singapore’s Star International Insurance contended that they were not accountable for the failure of a radial coal stacker during post-repair tests. The initial damage was covered under the industrial special risks (ISR) policy, held by Baralaba Coal Company.

The policy had expired by the time the final repair claim was made by the Queensland mine. However, the Federal Court determined that the insurers were still liable as the equipment had not been fully operational when the second failure occurred.

Justice Sarah Derrington, who presided over the case, stated in her ruling, “The additional damage sustained to the stacker after the insurance period concluded is irrelevant. The insurers’ duty to cover the reparation costs took effect during the policy period. Since the stacker was not restored to its pre-damaged state before the second collapse, the obligation persisted.”

The radial coal stacker initially suffered damage in March 2019, a month before the ISR policy expired. The insurers funded the initial repairs by September of that year. The equipment collapsed again in October during performance tests to verify the repairs.

Insurers argued that by October 27, 2019, the stacker was “substantially reinstated,” and the policy had lapsed by then. Therefore, they claimed that they were not required to cover the costs for the damages from the collapse.

In her decision, Justice Derrington refuted this viewpoint.

The insurers also pointed out that Baralaba Coal Company had signed a “form of release” related to the initial payout in June 2020, which they interpreted as absolving them from any subsequent liability from the storm and the collapse.

Justice Derrington countered, stating, “The context surrounding the creation and signing of the document indicates it was meant to settle the amount payable related to the storm damage from March 12, 2019. There’s no reason to believe it also covered the October 27, 2019, collapse.”

The court ruled that the insurers must cover the additional damages and the mine’s legal expenses. For a detailed understanding, you can access the ruling here.

Original article source: Insurance News Magazine.

Published:Tuesday, 25th Jun 2024
Source: Paige Estritori

Share this news item:

Insurance News

Bupa's Strategic Expansion into Mental Health Services 29 Jan 2026: Paige Estritori Bupa, a leading health insurer in Australia, has unveiled plans to significantly enhance mental health services by establishing a network of clinics named Mindplace. This initiative aims to open 60 clinics nationwide by 2027, aligning closely with the government's objective of operating 61 walk-in Medicare Mental Health Centres by mid-2026. - read more

Federal Support Secures Cohealth's GP Services Amid Financial Strain 29 Jan 2026: Paige Estritori In response to financial challenges faced by Cohealth, a non-profit community health service, the federal government has allocated $1.5 million to maintain its GP services in Melbourne's inner north and west. This funding ensures that clinics in Collingwood, Fitzroy, and Kensington will remain operational until 31 July 2026, providing essential care to approximately 12,500 patients who were at risk of losing access to their GPs. - read more

Rising Out-of-Pocket Costs Challenge Australia's Universal Healthcare 29 Jan 2026: Paige Estritori Patients Australia, in collaboration with La Trobe University, has released the 2025 Patient View Report, shedding light on the increasing financial burden faced by Australians seeking healthcare services. The report indicates that 62% of patients incur out-of-pocket expenses when visiting their GP, with nearly half of these individuals paying an average gap fee of $51 or more. - read more

Australian Insurers Adapt Investment Strategies Amid Geopolitical and Economic Changes 29 Jan 2026: Paige Estritori Australian insurers are actively revising their investment portfolios in response to evolving geopolitical events and a stabilizing economic environment. A recent report by Janus Henderson Investors reveals that 47% of insurers plan to increase their investment portfolio risk in the next 12 months, with a significant focus on private markets. - read more