Annual Meetings-Builders Risk Faulty Workmanship / LEG Provisions

Pdf Summary

The document discusses the topics of Defect, Damage, and the LEG Concept in relation to property insurance. It explores the manifestation of a defect, the allocation of risks, and the differentiation between defect and damage. It delves into the insuring clauses of All Risks Property Insurance, emphasizing coverage for physical loss or damage unless specifically excluded. The document presents various definitions of damage from countries like the US, UK, Canada, and Australia.<br /><br />It highlights the concept of fortuity, the indemnity principle, and the intricate balance between insurable risk and entrepreneurial risk. The LEG Concept, introduced by the London Engineering Group, provides exclusions for defects in property insurance policies, with variations like LEG 1, LEG 2, and LEG 3 focusing on different levels of coverage for defect-related costs.<br /><br />The text also references specific cases such as the Nukila Case and the Skanska v Egger case to illustrate the complex distinction between defect and damage in legal contexts. It explores the implications of LEG clauses in insurance policies and provides a hypothetical situation to explain their application. The document concludes with key takeaways, emphasizing the need to understand the difference between defect and damage and the challenges that arise in defect-related cases. It also touches on the Munich Re Claims expertise network and disclaimers regarding Munich Reinsurance Company's operations.

Asset Caption

Presented by:
Michael Gibbons, Munich Re, and Mark Katz, Mound Cotton Wollan & Greengrass LLP

Keywords

Defect

Damage

LEG Concept

Property Insurance

All Risks Property Insurance

Fortuity

Indemnity Principle

Insurable Risk

Entrepreneurial Risk

Nukila Case