Professional Liability Guide

PROFESSIONAL LIABILITY GUIDE

In the insurance context, the phrase ‘ in connection with ’ is frequently seen in the insuring clause with respect to the insured’s business. From a professional indemnity point of view, this was the case in Drayton v Martin, in which a claim for dual insurance between two separate professional indemnity insurers occurred. The insuring clause of the policy relevantly provided as follows: ‘On the terms and conditions herein contained the insurers shall indemnify the Assured up to an amount not exceeding the Sum Insured and Related Costs against all loss to the Assured (including claimants’ costs) whensoever occurring arising from any claim or claims first made against the Assured during the Period of Insurance and reported to the insurers during such period, in respect of any description of civil liability whatsoever incurred in connection with the Practice …’ 482 As can be seen, there were three causal phrases used in the insuring clause of the claims-made policy. In this regard, all loss to the insured ‘ arising from ’ any claim or claims was contemplated, and this loss had to be ‘ in respect of’ civil liability, and the civil liability had to be ‘ in connection with ’ the insured’s practice. ‘The words “in connection with” have a wide connotation, requiring merely a relationship between one thing and another. They do not necessarily require a causal relationship between the two things …’ 483 The similarity of the words used in Drayton v Martin and those used in Horsell v Divetwo – requiring merely a relationship between one thing and another – is not coincidental, as both decisions cited the earlier case of Our Town FM Pty Ltd v Australian Broadcasting Tribunal. 484 Notwithstanding the comments made in some decisions regarding the scope of phrases such as ‘ in relation to ’ and ‘ occasioned by ’, ultimately on the causative spectrum of remoteness (between the insured loss and the peril event), the phrase ‘ in connection with ’ appears to be of the broadest import. The loss and event merely require a relationship for them to fall within the ambit of ‘ in connection with ’, and that relationship need not be causal. In terms of interpretation, the phrases ‘ arising from ’ and ‘ in respect of ’ were not agitated in Drayton . Justice Sackville, however, interpreted ‘ in connection with ’ as follows:

482 (1996) 67 FCR 1, 11–12. 483 The similarity of the words used in Drayton v Martin and those used in Horsell v Divetwo is not coincidental, as both decisions cited the earlier case of Our Town FM Pty Ltd v Australian Broadcasting Tribunal (1987) 16 FCR 465. 484 (1987) 16 FCR 465.

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