International Construction & Engineering Insurance Seminar Overview

Follow-up: International construction & engineering insurance

On 30 April 2015, Clyde & Co partners from 4 different jurisdictions, all specialists in the field of construction insurance, held a panel discussion to compare the differing approaches in their jurisdiction to coverage issues commonly faced by construction insurers.

Present were Victor Rae-Reeves and Lee Bacon of Clyde & Co's London office, Ricardo Garrido from Madrid, Warren Hiepner from Johannesberg and James Chin from Atlanta.

A brief summary of the key topics discussed is presented here:

Issue

UK

Spain

South Africa

USA

Who must prove a loss?

Insured

Insurer

Insured

Insured

Against who is any ambiguity interpreted?

Insurer

Insurer

Insurer

Drafter of the policy

Will DSU cover respond where there are two causes of delay, one of which is excluded?

No

Depends on policy wording

DSU cover is relatively new with no cases but likely no if exclusion applicable to DSU

Depends on policy wording

Will defective parts installed in a structure be covered under a PL policy?

No

Likely yes

Likely no on the standard wording

Likely no, but states may vary

Can an insurer defend liability under a reservation of rights?

Yes

No

Yes provided adequate regard is had to any conflict of interest that may arise

Yes, but some states require that the ROR specifically identify every provision of the policy that the insurer wishes to reserve for a later date

Can declaratory actions be used to clarify the existence of cover?

Common

Do not exist as such

Yes but uncommon

Common at both state and federal level

Who has the burden of proving a loss has occurred?

In the UK, South Africa and USA, the burden of proving that a loss covered by the policy has occurred is on the insured. The burden of proving that any exclusion in the policy applies is on the insurer. The courts are minded to interpret exclusions restrictively However in Spain, an insured is only required to notify its insurer of a loss. The insurer must then investigate and prove that the loss is covered In all four countries, any ambiguity in the policy wording is usually interpreted against the insurer How does Delay In Start-Up ("DSU") Cover respond where there are two separate causes of delay? In the UK, the cause of the delay is what determines whether DSU cover applies. Where a delay has two causes, one of which is covered under the DSU policy and one of which is excluded, the entire loss will be excluded In Spain, there are no general rules...