What is "Damage" in Contract Works Claims?

Introduction

The purpose of this presentation is to comment on what is meant by damage for Contract Works Insurance claims. Although it sounds a straightforward concept, arguments over what constitutes damage have created a significant amount of litigation, both within the field of construction law and outside it. I will attempt to extract an appropriate test from that litigation to provide a working definition of damage. Of most interest to practitioners will be the important distinction between what is damage and what is a defect; damage being covered by insurance, and defects (and the effects of defects) being excluded to varying degrees. I will also review some of the cases on defect exclusions and introduce the standard defect exclusion wordings produced by the London Market.