Civil Engineering April 2022 | Vol 30 No 3

36 April 2022 Civil Engineering T he booklet, titled ENSafrica Construction ENSurance: recent influential court decisions and what they may mean for your business references judicial decisions made in 2019 and 2020. Although many of these deci- sions originate in the United Kingdom, Australia and Canada, they are worth paying attention to as they may prove to be influential on future decisions made by South African courts. We have selected five topics and pro- vide our expert analysis and commentary in respect of each one. While this is not intended to be a reference work, we do hope that it will be useful to those in the construction and insurance industries. The five topics and the judicial decisions to which they relate serve to demonstrate the significant interconnectedness between the fields of construction and insurance law. The selected topics are: 1. The status of interim payment certifi- cates on cancellation of a construction contract and implications for construc- tion guarantees and guarantee insurers. 2. Coverage implications for insurers in a construction contract in circum- stances where the construction all risks insurance policy and the reinsur- ance policy are not back-to-back. 3. Contractual liability exclusion clauses in liability insurance cover, including construction all risks covers. 4. The rectification of an on-demand construction performance guarantee issued by an insurer and the doctrine of strict compliance. 5. The controversial defective workman- ship exclusion in construction all risks insurance policies. In this article we unpack the third topic listed above. TOPIC THREE UNPACKED Contractual liability exclusion clauses in liability insurance covers, including construction all risks covers There is a common misconception that liability policies do not cover liability in contract, but only provide cover against liability in delict, or liability arising from the breach of a duty of care imposed by law. LIABILITY COVERS GENERALLY Generally, liability covers are worded to cover an insured where the insured is “legally liable” or “liable at law” to pay com- pensation consequent upon personal injury suffered by any person and/or loss of or damage to property. These words are broad enough to cover an obligation to pay both delictual damages and damages for breach of contract, but then within the limitations imposed by other terms of the policy. CONTRACTUAL LIABILITY EXCLUSION CLAUSES Contractual liability exclusion clauses are cardinal terms in this respect. They may be omitted entirely, or they may be Construc t i on and i nsurance law Recent influential court decisions and what they may mean for your business – Part 3 Rob Scott Insurance Practice Group | Executive ENSafrica rscott@ENSafrica.com Zara Sher Insurance Practice Group | Senior Associate ENSafrica zsher@ENSafrica.com ENSafrica has released a booklet on construction insurance topics with reference to judicial decisions made in 2019 and 2020. This article forms part 3 of a series that unpacks the various topics covered in the booklet.