By Elizabeth Shalders, Special Counsel and Sonya Parsons, Partner

In February 2025, the Full Federal Court of Australia handed down its decision in the case between the Uniting Church in NSW Property Trust (Uniting Church in Australia Property Trust NSW (Property Trust)), and the insurer for the Uniting Church, Allianz[1]. The High Court of Australia has since refused to hear an appeal.

This case is significant because it confirmed that the Uniting Church could not access insurance coverage for many claims of historical sexual abuse at Knox Grammar School.

It is a case that is highly relevant to large organisations that operate with numerous local branches or different charitable arms pursuing different activities.

The Facts

The Uniting Church of Australia (UCA) is not one single, incorporated legal entity.  It is an a ’amalgam’ of a variety of numerous groups, associations, synods, assemblies, committees, councils, bodies corporate and individuals.

The School is an all-boys school in Sydney, and at all relevant times it came under the umbrella of the Uniting Church.  It has its own constitution, and its own school board/council, but at all relevant times it was unincorporated.

So, when complaints and claims emerged of allegations of sexual abuse of students at the School, the Property Trust acted as the defendant.  It worked with the survivors and the insurer to settle the claims.

This proceeded smoothly for a period. Then, Allianz began declining insurance coverage for the School in respect of the claims.  The full details of the case are not set out here, but at a high level, Allianz said that:

• in 2004, an independent investigator delivered a report to the School, which showed numerous allegations of abuse over an extended period of time by multiple students against several teachers.
• The Uniting Church, and the insurer, were not notified of this report until later. As a result of the delay in notification, an exclusion clause in the insurance policy came into effect which entitled Allianz to deny indemnity for claims arising from 2005 onwards.

Challenges

It’s not easy to discern what the Uniting Church could or should have done better.   Among other things, the evidence showed that:

• it had a regular practice of requiring their agencies (including the School) to make insurance disclosures, and this was reflected in the content of the annual board papers of the School.
• senior members of the School and the headmaster were requested to complete an insurance declaration annually. This was known as an ‘insurance sweep’. The parties making the declaration were reminded of the importance of reporting any known claim or circumstance.
• in 2001, a fax from the School to the UCA contained 15 separate declarations from the finance director, headmaster, chaplain, director of boarding, director of studies, expressly confirming there were no claims or circumstances which might give rise to a claim.

The prospects of losing insurance coverage is one that will strike fear into many organisations, but this case highlights the difficulty in taking the steps necessary to ensure that notifications to insurers occur as-needed.  The challenge facing the UCA was one that is common to many organisations because:

• it is not uncommon to find large organisations where there are numerous local groups or unincorporated associations operating fairly autonomously, but under the umbrella of a large state or national-level body responsible for taking out insurance, dealing with legal proceedings, putting in place policies and procedures to manage risk, and co-ordinating activities across the organisation generally; and
• in these circumstances, the state or national body will be constrained with its resources, under pressure from local groups to let them operate autonomously, and conscious of the need to manage risks across a wide range of different areas (employment, workplace health and safety, privacy, cyber security, fraud or financial mismanagement, conflicts of interest and governance duties, taxation requirements including PAYG and the superannuation guarantee) and general regulatory compliance relevant in their area of operation.

Lessons Learned

What can charities and not-for-profits learn from this case that is helpful?

• the wording in your insurance contract will be relevant. Take some time to look at the scope of coverage, the definition of ’insured’, and think about how the policy provisions (and exclusions) will operate in your specific context. Don’t just assume the wording proposed by your broker is the most suitable and fit-for-purpose.
• think about risk management holistically. In particular:
  • review your risk matrix. Consider if it properly encapsulates and reflects the risks inherent in your organisation. Consider the mitigation strategies and whether they are effective; and
  • consider the flow of information within your organisation (both up and down the organisation to/from the Board and employees and grassroots volunteers). Is this flow working, and how does the flow of information correlate to the identification and management of risk in your risk matrix?

Ultimately any potential risk of loss of insurance coverage arising out of knowledge by one person or part of the organisation can be analysed with reference to your organisation’s structure.  The more complex the structure, the greater the focus needs to be on information-sharing regimes to avoid the potential loss of cover.

[1] Allianz Australia Insurance Limited v Uniting Church in Australia Property Trust (NSW) [2025] FCAFC 8