The contract is king: coinsurance in project policy disputes - DAC Beachcroft

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The contract is king: coinsurance in project policy disputes

Published 18 May 2022

In construction projects it is common to have a project policy to cover various members of the construction team.  However, it is dangerous to assume that such a project policy covers all eventualities and precludes claims between the parties.  DAC Beachcroft partner Lyn Crawford reviews a recent TCC decision  which serves as a useful reminder that the extent of cover will depend on the terms of the underlying contracts between the parties. 


The Rugby Football Union v Clark Smith Partnership Limited and FM Conway Limited ([2022] EWHC 956) concerns construction works at Twickenham Stadium ahead of the 2015 Rugby World Cup. The Rugby Football Union (RFU) engaged Clark Smith Partnership Limited (CSP) to design ductwork and FM Conway Ltd (Conway) to install it.  The RFU claimed that the ductwork was defective, due to defective design by CSP and/or defective installation by Conway.

The recent hearing was on a preliminary issue, where the Court had been asked to decide whether Conway was entitled to rely on a coinsurance defence and claim under a project policy taken out by the RFU with RSA.


The Court rejected Conway’s coinsurance defence.  The Judge found that three conditions of agency had not been satisfied: (i) the RFU had not had authority to contract on Conway’s behalf; (ii) the RFU had not intended to contract on Conway’s behalf; and (iii) the terms of the policy precluded Conway from being covered.

After a review of the relevant authorities, the Judge said that the starting point must be the terms of the contract between the parties.  The main problem for Conway was that its underlying contract with the RFU was on JCT standard terms (Insurance Option C), which expressly excludes damage caused by a contractor’s own defective works.  The Judge found that the RFU was therefore only authorised and could only be said to have intended to arrange insurance on behalf of Conway as required under the JCT contract.  Conway referred to discussions at the time the policy was incepted in an attempt to argue that there was authority and intention beyond the JCT contract provisions, but the Judge found that there was no compelling evidence to deviate from the contract.

The Judge also rejected Conway’s argument that the waiver of subrogation in the policy precluded RSA from bringing a claim, on the basis that the policy could not operate to protect Conway against claims arising out of a matter in respect of which Conway was not insured.


It is clear from this decision that the contract remains king and it is the terms of the contract between the parties which will determine the existence and extent of any project policy cover.  Contractors and sub-contractors should not assume that a policy which covers multiple parties leads to an implied term that precludes claims between those parties.  Parties should also ensure that any discussions concerning insurance and project policy coverage are carried through to the contracts, as implied terms and pre-contract discussions are unlikely to override express terms.

If you would like any further information on this decision or advice on construction insurance generally, please contact Lyn Crawford on the details below.


Lyn Crawford

Lyn Crawford


+44(0)161 934 3163

James Gardiner

James Gardiner


+44(0)161 934 3173