Running for cover

The Liverpool Tower crane collapse has now developed into an attempt by the insurance company to escape liability. They are arguing small print. Aspen Insurance UK Ltd is telling Bowmer & Kirkland’s subcontractor Adana Construction Ltd that the policy doesn’t cover the potential cause of the disaster. Oh, come on you insurance wallahs, do turn that small print into great big red letter warning print. The Construction Industry doesn’t want a discounted premium, it doesn’t want you to be super competitive via neat exclusions, it wants to pay you for cover.

The 79m tower crane lifted itself off its piled concrete base in July 2009. Bowmer & Kirkland was the main contractor for the eight-storey hotel and seven apartments at Kings Dock Mill. It fell across the road onto the neighbouring apartment block. The crane’s counterweights, weighing 56 tons, broke free and crashed through the roof and six floors of that building. The crane driver
Iain Gilham fell from the crane cab on to the roof of the apartments and through the hole created by the counterweights. He survived, but his legs are now paralysed. Astonishingly, nobody else was injured.

Adana Construction was subcontracted to carry out the concrete crane base attached to the piles. The crane base or pile cap was to transfer the load being generated by the crane into the piles. The instruction by the designer to Adana was to fix four dowels of 20mm of rebar into each of the four piles with resin to a depth of 400mm. Once all done, Bowmer & Kirkland as main contractor erected the crane.

The crane driver has a significant claim for compensation. He is suing Bowmer & Kirkland and also Bingham Davis, the structural engineers. Bowmer & Kirkland has brought into the litigation their subcontractor, Adana.

It’s an all-embracing cover, a sort of sales patter for a mish-mash cover. It’s attractive to the ordinary contractor who, like all ordinary contractors, trusts to hope he has lucky dip protection

Adana called on its insurance folk Aspen to get it all sorted. Aspen told Adana that the policy didn’t stretch far enough for Aspen to pick up any potential liability. Seemingly the dowels installed by Adana were not installed into the pile tops by the specified depth of 400mm. Some were in to as little as 70mm. You might see why Bowmer & Kirkland want to collar their subcontractor. You might also see why Adana’s insurers were twitchy. See too why Adana wants the strength of the insurance company around them. By the way, the iffy base may not be the culprit if the crane was overloaded. So, what’s up? The policy is called a Building Services Combined Contractor’s Liability Insurance Policy. It’s an all-embracing employer’s liability, public liability, product liability, pollution liability and financial loss cover. Oh dear, does all that make you nervous? It’s a sort of sales patter for a mish-mash cover. It’s attractive to the ordinary contractor who, like all ordinary contractors, trusts to hope he has lucky dip protection. It says, “the underwriters will indemnify the insured against all sums, which the insured becomes legally liable to pay for damages and claimant’s costs and expenses arising out of … .”

But then come the exclusion clauses. One such says the underwriters will not cover “the failure of any product to fulfil its intended function”. The policy even defines “a product”; it includes “goods manufactured, constructed, installed” and more besides. The subby blanched. The lawyers entered the stage. A trial as to the meaning of “product” and “scope” of cover came into the High Court.
Neat arguments were canvassed. The judge was clear - it’s a lump of concrete with dowels, that’s all. It’s not like making the gearbox for my car. The insurer can’t use its exclusion clause. The concrete lump is not a “product”.

Look, it is wholly unrealistic to expect ordinary construction folk to have the expert knowledge required for fathoming the meaning and objective intention of small print in insurance policies.”Product” and its meaning required a trial, damn it! Won’t do.

A tower-crane is a special feature and special hazard. It requires specific tower-crane insurance for all events and all circumstances and all cock-ups. The project itself requires the appointment of an insurance professional that is qualified in construction too. Put that in place today, now please.

Tony Bingham is a barrister and arbitrator at 3 Paper Buildings, Temple