Spire Healthcare Ltd v Royal & Sun Alliance Insurance plc [2018] EWCA Civ 317 is the case that shows aggregation is not always in the insured's favour. Here a broad aggregating wording collapsed a very large number of claims into a single limit, sharply reducing the cover available.
The claims arose from the conduct of a surgeon who carried out unnecessary and negligent procedures on many patients over a period of years. The policy provided one limit for each claim and a higher aggregate limit for claims that were "consequent on or attributable to one source or original cause". At first instance the judge found there were two separate causes — a tendency to over-treat and, in other cases, to under-treat — so the claims did not all aggregate.
The Court of Appeal reversed that finding. It held that all of the claims were consequent on or attributable to one source or original cause: the surgeon's negligent and dishonest way of practising. Because the aggregating wording was wide, all of the claims were treated as a single claim, and the lower per-claim limit applied to the whole. The result was that a broad aggregation clause reduced, rather than expanded, the effective indemnity.
Whether aggregation helps or harms depends on how the limits are built. If the each-claim limit is lower than the aggregate limit, aggregating claims can pull them down to the smaller figure. If the each-claim limit is the same as or higher than the aggregate, the effect is different again. This is why the aggregation clause and the limit structure have to be read together, not separately.
The lesson is not confined to healthcare. Any professional exposed to a repeated pattern of error should understand how their aggregating wording interacts with their limits. Firms reviewing solicitors' PI insurance and those arranging cover as insurance brokers should treat the aggregation clause as a core term. Apex reads these clauses in the context of a firm's actual work when arranging cover.
Spire shows the limit structure decides whether aggregation helps or harms. 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.