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Oh Buoy! Court finds accidental damage not covered due to faulty design exclusion

Sheehan v Lloyds Names Munich Re Syndicate Ltd (2017) FCA 1340

The Federal Court of Australia recently considered the principles surrounding proximate cause in the context of a claim for indemnity under a marine insurance policy. The Court found in favour of the insurer in concluding that the faulty design exclusion operated to exclude cover to the insured. The decision confirms that the courts will look for the most effective and dominant cause of the damage rather than multiple concurrent causes to which the Wayne Tank principle might then apply.

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