The UK high court refused to order insurers to indemnify Leeds Beckett University for the loss of a building which cracked and was subsequently demolished in 2011 because the damage was not accidental. The below-ground blockwork had turned into mush as a result of flowing ground water which the evidence revealed was there at the time of construction in 1996.
The policy covered ‘damage’ to the building which was defined as meaning ‘accidental loss or destruction of or damage’. The court found there must be something which could not be foreseen. The policy wording provides an indemnity against accidents which may happen, not against events which must happen. Policies usually cover the risk of something happening, not the inevitability of something happening.
The court summarised the following principles:
- The insured must prove that the loss was caused by some event covered by the policy wording but does not have to prove the exact nature of the accident or casualty.
- Accidental damage means damage that is not wilful or deliberate.
- Accidental damage means damage that was caused by a chance event, against the risk of which the insurance was taken out.
- Accidental damage does not mean damage that was inevitable.
- Inevitability must be assessed prospectively from the time that the cover was taken out; foreseeability is irrelevant.
- Accidental damage does not mean damage to the property due to the inherent characteristics of the property.
- There is a critical distinction between damage caused by an inherent weakness and damage caused by an external fortuitous event.
The claim was dismissed.
