Navigating Complex Litigation: Build Co's Journey to Resolution and Settlement

This is an overview of a claim filed under a primary (single carrier) professional indemnity policy held by Build Co, a design and construct contractor.

Build Co was engaged to design and construct a container port facility by a company that became the Tenant of the facility on completion.

After taking possession of the facility, the Tenant raised two significant complaints: a Lease Dispute regarding the size of the lease area and a Defect Dispute involving premature deterioration of the container port surface, which would lead to substantial loss of revenue for the Tenant.

Before providing Build Co an opportunity to respond to its complaints, the Tenant commenced proceedings against Build Co and three of Build Co's subcontractors.

Build Co denied each of the allegations.

Build Co's claim presented several complex challenges that required careful navigation: 

1. The Tenant's claimed losses significantly exceeded the policy limit.
2. The resolution of the Lease Dispute was crucial to accurately quantify the losses related to the Defect Dispute, as the total amount of land available under the Lease directly influenced the rectification costs of the port surface.
3. As three subcontractors were involved in the work responsible for the design and installation of the port surface, they had to be included in the proceedings and expert advice was required to support Build Co's defence against their liability.
4. There was potential pollution at the container port which could increase the rectification costs in the Defect Dispute. The pollution disposal costs could not be determined until the rectification works were underway. Moreover, the Tenant demanded full indemnification for any business interruption, even though Build Co and the subcontractors did not accept liability for the issue.

Discover how our approach can help Build Co successfully resolve their insurance claims.