While performing services on a construction site owned by a Port Authority, an employee of a contractor slipped and fell on wet soil and rocks because of unsafe working conditions and sued for damages. The construction management firm, Techno, was insured under a comprehensive general liability policy. When the port authority was sued by the worker it sought an indemnity under Techno’s policy.
The claim for cover under the policy by the Port Authority as an additional insured was defeated by a policy exclusion that “this insurance does not apply to the rendering of or failure to render any professional services”. Any blame on the part of Techno would have been based on their failure to perform their professional services as expert professional construction managers responsible for inspection services at the port authority’s facilities. The exclusion therefore applied.
This case is useful for a few well-phrased statements by the court regarding policy interpretation. The law is not exactly the same as South Africa but the quotes are succinct statements of interpretation rules:
- “Well-settled contract law provides that courts enforce contracts based on the intent of the parties, the express terms of the contract, surrounding circumstances and the underlying purpose of the contract.”
- “Exclusions in insurance policies are presumptively valid and enforceable if they are specific, plain, clear, prominent, and not contrary to public policy.”
- “Courts will find a genuine ambiguity to arise where the phrasing of the policy is so confusing that the average policyholder cannot make out the boundaries of coverage. Far-fetched interpretation of a policy exclusion are insufficient to create an ambiguity requiring coverage.”