Subcontractor required to provide own insurance held not entitled to project insurance (UK)

Where project-wide cover was taken out for a construction contract for extensions to a school but the roofing contractor was obliged to take out its own insurance, it was held that the roofing contractor who caused a fire and a loss of £8.75 million was not entitled to the benefit of the project-wide insurance. The facts are sadly familiar. Hot work was done on a roof using a blowtorch to stick down roofing membrane. A fire occurred which spread and caused extensive damage to the building. It was an express term of the roofing subcontract that the subcontractor would obtain its own third-party liability insurance cover and it did so for £5 million. The three project insurers paid out £8.75 million and sought a subrogated recovery of the £5 million from the roofing subcontractor, essentially from its insurers who resisted the claim. It was argued by the roofing contractor that it was entitled to cover provided by the project insurance…

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