The roof of the global headquarters was damaged due to water ingress
The UK Court of Appeal has ruled against a group of insurers in a dispute over a claim around damage to the global headquarters of Sky.
Water ingress entered the roof of the building, which is based in Osterley, west London, during its construction.
The roof was made up of 472 individual wooden cassettes and it was highlighted that a “substantial number” suffered water damage.
This led to wetting of internal timbers, with Sky and Mace – the contractor that worked on the construction of the building between 2014 and 2016 – alleging irreversible swelling and structural decay by the end of the period of insurance.
As a result, Sky and Mace brought claims for declarations and indemnities for remediation of all the damage.
A High Court hearing was held in 2023 after insurers contested the claim.
It ruled that Mace and Sky were entitled to be indemnified only for damage which had occurred during the insured period and not for the costs of remediating any damage that had deteriorated or developed thereafter.
All parties appealed, with cases being heard at the Court of Appeal in October 2024.
Appeals
According to a court document, the policy stated that “the insurers shall, subject to the terms of this contract of insurance, indemnify the Insured against physical loss or damage to property insured, occurring during the period of insurance (POI), from any cause whatsoever”.
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However, the insurers contended that Mace was not insured under the policy in respect of any of the sums for which it sought indemnity and was not entitled to any relief.
In regards to Sky, insurers argued that it was entitled only to an indemnity in respect of the costs of addressing damage as it existed at the end of the POI.
Meanwhile, Sky and Mace argued that they should have been indemnified for the cost of investigating the damage and future costs of remediating the roof.
The Court of Appeal felt that “the cost of remedying the condition of the roof as it existed at the time of trial was not in any respect attributable to any failure on the part of Mace or Sky to act reasonably”.
It went onto allow the appeals of Sky and Mace and dismiss the appeal of the insurers.
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