Cox v Bankside Members Agency Ltd [1995] 2 Lloyd's Rep 437 is an early and influential aggregation authority. It arose from errors and omissions claims against Lloyd's members' agents, and it examined how an aggregation wording works when a large number of claimants are all looking to the same, limited fund of professional indemnity cover.
Numerous claimants brought errors and omissions claims against agents. The professional indemnity cover was subject to a limit, and the claims in aggregate threatened to exceed the money available. The court had to consider how the aggregation wording operated and how a finite fund should be distributed among competing claimants.
The Court of Appeal addressed how the aggregating language applied to a body of related claims and how the available indemnity should be approached where it was insufficient to meet every claim in full. The decision is cited for its treatment of the mechanics of aggregation against a capped limit, and for the practical difficulty that arises when a single limit has to answer many claims arising from related conduct.
The case is a reminder that a professional's limit of indemnity is a fund, not a promise to pay every claim in full. When related claims aggregate against one limit and that limit is exhausted, there may be nothing left for the professional's own protection, or for later claimants. This is why the size of the limit and the way the aggregation clause operates must be considered together.
The point applies to any professional carrying a single aggregate limit. Firms arranging cover as insurance brokers should weigh the adequacy of the limit against the realistic number of claims a systemic error could generate, and expert witnesses whose methodology is used across several instructions should consider how a limit would be shared if several claims arose together. Apex helps professional firms size a limit against their real exposure.
Cox v Bankside is about the adequacy of a finite fund. Check:
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 724952. This entry is general information, not advice on any particular policy.