An Australian court found that the definition of insured property in an all-risks policy covering money losses did not include a loss suffered by the insured operator of automatic teller machines did not cover losses in its bank account. The claimant blamed the defendant security company for the losses and sought join their Lloyd’s insurer in the proceedings.
The ATMs could be used for exchanging Australian currency into cryptocurrency and vice versa. Losses occurred in relation to four ATMs resulting in an alleged loss totalling about AU$2.3 million. The first defendant provided ATM security services and in particular currency collection and handling. An accounting reconciliation revealed a shortfall between amounts collected and amounts remitted to bank account of the operator of the machines.
The policy defined “insured property” as:
“money, currency, coin, bullion, precious metals of all kinds and in whatsoever form and articles made therefrom, gems, precious and semi-precious stones, certificates of stock, bonds, coupons, and all other forms of securities, bills of lading, warehouse receipts, cheques, drafts, money orders, stamps, food stamps, insurance policies, and all other negotiable and non-negotiable instruments or contracts representing money, in which the Insured is interested or for which the Insured is legally liable.”
The policy insured “loss of or physical damage to the insured property … whilst in or upon the premises”.
The court held that the definition quoted listed items nearly all of which are incontestably physical objects (“bullion”, “precious metals”, etc) or instruments (“certificates of stock”, “bills of lading”, “cheques”, etc). Although the language of some of the items was more general (“money”, “securities”) the definition did in no case necessarily incorporate intangibles. The reference to “currency” was a reference to currency in its physical form. Furthermore, the policy applied to “physical” loss or damage to insured property “in or upon a particular location”. In this context the policy only covered physical items of property. A bank deposit was not included and the shortfall in deposits was not covered.
Joinder of the insurer was therefore refused.