Is It Covered and Who Is It At Fault? It Depends!

Within construction, contractual agreements and the division of work between contractors can make it difficult to know whose insurance is covering what – one reason why working closely with a broker is important. Here’s one scenario demonstrating the complications.


  • The main contractor asks a sub-contractor to install roofing at the client’s premises
  • The sub-contractor asks a manufacturer to design and build the roofing
  • The main contractor supplies tiles for the sub-contractor to install
  • A storm damages the roofing at the client’s premises.

Who Is Liable?

  • NOT the client’s Property Damage/Business Interruption Insurer – the policy definition of ‘storm’ was not met. They suggest the tiles were unfit for purpose.
  • NOT the roofing manufacturer’s liability and Professional Indemnity (PI) insurers – they say their design was faultless and blame an installation issue, or materials not meeting their design specification.
  • NOT the main contractor’s liability or PI insurers – the contractual terms make the sub-contractor responsible for design and installation.
  • NOT the sub-contractor’s PI Insurers – they say installation was faultless and it was not their design.

Who is ultimately liable is down to the investigation but all insurers, whose policy terms potentially make them liable, should be informed of the incident. Care must be taken. Not notifying the insurer could later result in an insurer denying liability, due to late notification, if the claim eventually falls on your client’s shoulders.

  • All parties’ contractual responsibilities must be checked for legal liabilities. Be mindful that contractual liabilities may not be appropriately covered in insurers’ wordings.
  • A loss adjuster, loss assessor or surveyor should also determine the actual cause of damage and obtain storm strength data, applicable to the specific locality, from reliable sources.
  • Several insurers could actually be involved, along with solicitors and even forensic experts.
  • Such claims highlight the requirement for a cross-discipline approach covering legal, insurance and process perspectives. Luckily, this is something an experienced broker can provide.