Selected cases

Supreme Court of New South Wales · [2026] NSWSC 579

Sphere Healthcare v Allianz

A NSW Supreme Court insurance case about hand sanitiser production, bulk ethanol storage, broker changes and a refused fire claim.

Supreme Court of New South Wales28 May 2026

Plain-English explainers, not legal advice. Use the linked official source for section-level detail, and get advice for your situation.

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Quick read

  • Insurance disclosure is an operating discipline, not admin.
  • A NSW Supreme Court insurance case about hand sanitiser production, bulk ethanol storage, broker changes and a refused fire claim.

Use this to check

  • New business activities can trigger fresh insurance disclosure questions.
  • Dangerous goods storage should match permits, standards, site capacity and insurance disclosures.
  • Changing brokers can create confusion about authority, cancellation and policy wording.

Decision snapshot

  1. What happened

    • Sphere Healthcare manufactured health care products and infant formula at Moorebank.
    • During the COVID-19 pandemic, the Aunew group wanted to make hand sanitiser through the Sphere site and struggled to source ethanol locally.
    • At the same time, insurance was being arranged through brokers for an Industrial Special Risks policy with Allianz and a limit of indemnity of $26.8 million.
    • Sphere ordered a large quantity of ethanol from Shanghai.
  2. What the court had to decide

    • The Supreme Court of New South Wales had to decide whether the insureds were entitled to indemnity under the ISR policy.
    • Issues included whether the original policy had been cancelled, whether later policy wording replaced or varied the contract, the scope and timing of the duty of disclosure under the Insurance Contracts Act, whether Allianz had waived disclosure, how alteration-in-risk endorsements operated, and whether Allianz could reduce liability to nil or refuse the...
  3. What the court decided

    • The Court held that the policy remained relevant but that the duty of disclosure continued to the later variation or replacement of the policy wording.
    • Sphere had not complied with that duty because a reasonable insured would have known that bulk ethanol exceeding ordinary dangerous-goods storage capacity was material to the insurer's decision.
    • The Court accepted the insurer's evidence that it would not have accepted the risk if properly told, so Allianz was not liable to indemnify the insureds for the fire loss.

Practical impact

Practical read

  • Insurance disclosure is an operating discipline, not admin.
  • When a business changes what it makes, stores dangerous goods differently or changes brokers during a fast-moving project, the insurance file must be updated before a loss, because the insurer may later say it would not have...

Useful next steps

  • New business activities can trigger fresh insurance disclosure questions.
  • Dangerous goods storage should match permits, standards, site capacity and insurance disclosures.
  • Changing brokers can create confusion about authority, cancellation and policy wording.
  • An insurer may reduce liability to nil if it proves the undisclosed risk would not have been accepted.
  • Tell the broker and insurer when a new product line changes materials, processes or storage.

Practical read

This case reads like a risk-management lesson written in fire damage. The business was responding to a genuine commercial opportunity during the pandemic. Hand sanitiser demand was urgent, ethanol supply was tight, and the group moved quickly. But the insurance risk moved too. The question was not only whether there was a policy. It was whether the insurer had been told enough about the changed business activity and the bulk ethanol risk.

The Court worked through broker authority, cancellation, replacement policy wording, duty of disclosure, waiver, endorsements, alteration in risk and the insurer's remedies. The practical theme is simple: do not let the insurance file lag behind the business. If a factory starts making a new product, imports flammable input at scale or stores materials outside the ordinary dangerous-goods setup, that is not a background detail. It may be central to whether an insurer would accept the risk.

For small businesses, the lesson is wider than manufacturing. A cafe adding production, a cosmetics brand changing formulations, a warehouse storing batteries, an ecommerce business adding imported goods or a health business changing premises can all change the risk story. Insurance renewal and broker-change periods are exactly when these details need to be surfaced, written down and checked.

Checks to run

Key points

  • Tell the broker and insurer when a new product line changes materials, processes or storage.
  • Keep dangerous-goods storage capacity, permits and site diagrams aligned with operations.
  • Record who inside the business is responsible for insurance communications.
  • Make broker appointment and cancellation authority clear when switching brokers.
  • Treat policy schedules, endorsements and renewal documents as active risk documents, not filing cabinet paperwork.

Key takeaways

  • New business activities can trigger fresh insurance disclosure questions.
  • Dangerous goods storage should match permits, standards, site capacity and insurance disclosures.
  • Changing brokers can create confusion about authority, cancellation and policy wording.
  • An insurer may reduce liability to nil if it proves the undisclosed risk would not have been accepted.

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