The Case

In a dispute concerning the claimant police authority's insurance in respect of public liability for 'accidental' injury or damage the court held that there was no reason to think that the purpose of the underlying policy was anything other than the protection of the police fund against claims by third parties for personal injury or damage to property. It was not the commercial purpose of the parties to confer cover against private liability in the sense of contractual liability arising from private agreements and it was clear that a police authority and an insurer, when arranging public liability cover, would, in the ordinary course, have every reason to think that a liability under the Riot (Damage) Act 1886 would be a type of liability that was expected to fall within that cover. Accordingly, the phrases in issue were to be read as giving effect to that commercial purpose and the claimant would be entitled to be indemnified by the defendant pursuant to the excess policy in respect of any liability of the claimant to pay compensation to third party claimants under the 1886 Act.