Does Natural Disaster Cover under commercial insurance policies include or exclude EQC cover?

August 16, 2013

in Property

Property: HousingOne of the outcomes of the Christchurch earthquakes has been a flood of litigation around insurance and the questions of coverage.

A lot of litigation has concerned issues relating to insurance between Landlord and Tenant.

Another issue that has arisen in respect to commercial properties is the question of who covers what as between the commercial insurer and EQC.

One aspect of this has been the subject of a recent High Court decision on the question of whether or not natural disaster cover under a general material damage policy is inclusive or exclusive of the amounts payable by EQC.

Body Corporate 398983 v Zurich Australian Insurance Limited [2013] NZHC 1109 a Body Corporate of an apartment complex which was badly damaged had a material damage policy with Zurich.  The High Court was asked to decide the question of whether the insurance policy with Zurich was inclusive or exclusive of the amounts payable to the Body Corporate by EQC.

The High Court held that the amount payable under the policy is exclusive of the amounts payable to the Body Corporate by EQC.  The result was significant as the Body Corporate was entitled to the sum insured of $12.95 million as well as $6.8 million received from EQC.

Careful consideration of insurance cover has always been important however in light of the environment that exists post the Christchurch and now Wellington earthquakes it is imperative that you carefully consider all aspects of your insurance coverage.

If you require any advice or further information on the matters dealt with in this publication please contact the lawyer at Farry and Co. who normally advises you, or alternatively contact:

Paul Farry

09 379 0055 or 03 477 8870


The information contained in this publication is intended as a guide only.  It does not constitute legal advice and should not be relied upon as such.  Professional advice should be sought before applying any of the information to particular circumstances.  While every reasonable care has been taken in the preparation of this publication, Farry and Co. does not accept liability for any errors it may contain. 

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