Double insurance – What happens when the same risk is insured twice?

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Insuring the same risk twice with different insurers is not as silly as it sounds. In the early days of marine insurance, insureds commonly purchased more than one insurance policy to cover the same risk in order to protect themselves...

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Crossley Gates, Partner and Frank Rose, Partner — Keegan Alexander Barristers & Solicitors

11 May 2026

4 mins read

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Insuring the same risk twice with different insurers is not as silly as it sounds.

In the early days of marine insurance, insureds commonly purchased more than one insurance policy to cover the same risk in order to protect themselves against insurer insolvency.

In England, insureds placed the bulk of their marine insurance with individual underwriters through a certain coffee shop called Lloyd’s Coffee House.

Those individual underwriters were not subject to any financial controls and insolvencies were common.

THE DOCTRINE OF CONTRIBUTION

Before you dismiss the risk of this happening in New Zealand today, I remind you of AMI and CBL, and of HIH in Australia. In the USA, AIG narrowly avoided insolvency through a government bailout.