A Melbourne court has handed QBE a win in a coverage fight over an exploding blimp, ruling its aviation policy didn't extend to aircraft the insured neither owned nor operated.
The decision in Cavanagh & Anor v Airship Solutions [2026] VCC 559, delivered on May 4, 2026, by Judge Palmer in the County Court of Victoria, turned on a question that will sound familiar to anyone who has wrestled with an aviation schedule: when a policy covers "the Aircraft described in the Schedule," does that mean specific machines, or any aircraft matching the model description?
The facts are unusual. On March 7, 2023, Paul Cavanagh and Erminio Rossetto were trying to re-inflate a blimp owned by the Frankston Beach Association using a garden airblower. The blimp exploded, allegedly when sparks ignited hydrogen inside it. Both men were severely burned. They sued Airship Solutions, the manufacturer that had sold the blimp to the association in February 2022, and its director Mathew Tubb, who had allegedly told Mr Cavanagh the blimp could be re-inflated with an airblower.
Airship turned to its insurer. QBE initially appointed Colin, Biggers & Paisley on July 25, 2023, to help respond to the claim, while expressly reserving its position on indemnity. On February 14, 2024, QBE declined cover under the Aviation Aircraft Insurance Policy (period December 12, 2022 to December 12, 2023), which carried a $20 million third-party liability limit. Airship joined QBE to the proceeding in March 2025, seeking a declaration of indemnity.
The schedule listed model types - including an "AS7 30ft blimp" - but no serial numbers. Airship argued that any blimp of a listed model fell within cover. That construction, the court noted, would in theory extend coverage to every blimp Airship had ever manufactured and sold, plus any commercially available drone of the listed models anywhere in Australia.
Judge Palmer wasn't persuaded. Reading the contract as a whole, he found several features inconsistent with such a sweeping interpretation: a "Uses Limitations Clause" excluding certain operations unless agreed by QBE, a pilot warranty tied to named pilots, a "No abandonment" clause referring to the aircraft remaining the property of the insured, and conditions precedent requiring the insured to maintain airworthiness and log books. These provisions, the judge said, only make sense if the insured has some ownership or control over the aircraft.
He also pointed to the policy's apparent purpose - aligning with strict liability under section 10 of the Damage by Aircraft Act 1999 (Cth), which targets owners and operators. And he noted the parties' history: Mr Tubb had previously paid for additional cover when operating extra aircraft, and had to list two E17 blimps separately to fly them simultaneously - behaviour that would make little sense if a single model listing covered every blimp of that type ever made.
The blimp involved in the incident was owned by the Frankston Beach Association and not being operated by Airship at the time. Coverage, the court held, did not extend to it.
Airship's second front - that QBE had breached its duty of utmost good faith under section 13 of the Insurance Contracts Act 1984 (Cth) - also failed. The judge found QBE's conduct in providing initial legal assistance while investigating, then declining indemnity, was consistent with an insurer acting in good faith.
For claims teams, the takeaway is direct: schedules without serial numbers don't automatically widen the net, and an insurer's early appointment of defence lawyers under a reservation of rights doesn't lock in indemnity.
