Interpretation of medical malpractice civil liability insurance policy

AAI Limited t/as Vero Insurance v GEO Group Australia Pty Limited [2017] NSWCA 110 required the Court of Appeal to consider the interpretation of an insurance policy. The headnote summarises the outcome as follows:

The Court of Appeal, dismissing the appeal, held, per Payne JA (Macfarlan and Simpson JJA agreeing):

1.    The language of the coverage provision of the Policy, in the context of the other terms of that contract, favours the conclusion that the pleaded claim by Mr Mace against GEO, which pleading was repeated by GEO against Vero, was a claim “resulting from the conduct of the Healthcare Services”, as those terms are further defined in the Policy: at [55].

2.    An objective observer would conclude that the parties intended that the “conduct” of the Healthcare Services included an omission by GEO to provide Healthcare Services: at [56].

3.    The primary judge was correct to conclude that the insuring clause was broad enough to provide cover to GEO in circumstances where, by reason of a failure of GEO’s healthcare systems to identify Mr Mace as requiring assistance, he suffered loss or damage. This is because that omission, properly characterised, was a result of the conduct by GEO of Healthcare Services, namely the omission as part of the Healthcare Services GEO was otherwise providing to inmates at Parklea to identify Mr Mace’s risk of self-harm: at [64].

4.    The “conduct” of Healthcare Services extended to acts and omissions in identifying and assessing inmates for the purpose of determining which further health services and treatments were required: at [65]

5.    At the time of Mr Mace’s admission, GEO was engaged in providing Healthcare Services to inmates at Parklea and that the failure to assess Mr Mace was an omission in the course of provision of Healthcare Services to inmates. The claim resulted from the conduct of Healthcare Services: at [67].


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