A Lloyd's insurer has been told its public liability policy must cover a labour hire worker's injury, after an NSW court dismantled its employment exclusion defence.
The Supreme Court of New South Wales ruled in Tazleem v Certain Underwriters at Lloyds Listed in Annexure "A" [2026] NSWSC 124 that a worker injured at an industrial site in South Windsor was not an employee of the insured business - meaning the insurer could not escape the claim by relying on a standard exclusion for employee injuries.
The case, originally filed in the District Court on February 5, 2021, and later transferred to the Supreme Court, arose from a serious workplace accident on February 9, 2018. Sheik Abdul Tazleem, a diesel mechanic, was struck by a heavy excavator bucket that came loose from forklift tines while he was working at the premises of Better Truck Repairs Pty Ltd (BTR). He was airlifted to Westmead Hospital with cervical spine, elbow, and scalp injuries.
BTR had since gone into liquidation, and its public liability insurer - Certain Underwriters at Lloyd's — was brought into the proceedings under the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW). The second defendant, the Workers Compensation Nominal Insurer, stepped into the shoes of JP Business Consulting Pty Ltd (JPBC), a deregistered labour hire company.
At the heart of the dispute was the insurer's employment exclusion clause, which shut out coverage for injury to any "Employee" - defined under the policy as any person employed under a contract of service or deemed at law to be employed by the insured. The insurer argued that BTR had directly recruited, interviewed, and set the working conditions for the plaintiff, making him BTR's employee and placing his claim outside the policy's reach.
Acting Justice Elkaim was unconvinced. The Court found that the contractual arrangement between BTR and JPBC created a system where anyone working at BTR's premises automatically became an employee of JPBC. JPBC paid the plaintiff's wages from the start, held the workers compensation policy that accepted his claim, and paid over $400,000 in workers compensation expenses. The Court also drew an adverse inference from the insurer's failure to call BTR's principal, Mr Sultana, as a witness - the very person alleged to have hired the plaintiff.
With the exclusion defeated, the policy responded - but not in full. A $50,000 excess for labour hire personnel applied, and the Court reduced the recoverable damages accordingly under sections 4 and 7 of the Third Party Claims Against Insurers Act.
Both defendants conceded breach of duty. Contributory negligence was fixed at 15% against the first defendant and 10% against the second. The plaintiff's lower back condition was found not causally linked to the accident in the claim against the insurer, though the second defendant was estopped from denying it due to a prior agreement under section 66A of the Workers Compensation Act 1987 (NSW).
Damages against the first defendant landed at $236,319.74. Against the second defendant, the figure was $228,694.82. Liability between the two defendants was split 80/20 on the cross-claims.
The decision was handed down on February 26, 2026.
