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The
cost to an engineering company of remedial design work to several bridges
which had been supplied under two separate contracts, constituted two
separate claims under a policy which did not contain a "series"
provision.
Mabey
& Johnson was an engineering company, engaged, among other things,
in the design, manufacture and worldwide supply of steel bridges. The
defendant insurers wrote its primary layer professional indemnity insurance.
During the policy period a steel bridge partially collapsed. As a result
the company reviewed the design and construction of a number of bridges
including steel bridges which were due to be erected and in so doing
incurred costs exceeding £2 million. Such remedial work was covered
by a policy extension. The policy limited the indemnity to £2
million "for a single claim". The policy did not contain a
"series" provision. The bridges had in fact been supplied
pursuant to two separate contracts. The insurers argued that only one
claim could be made, but the engineers argued that as the bridges were
to be supplied under two separate agreements, two separate claims arose
under the insurance.
It
was held that it was clear on the evidence that there were two separate
and distinct contracts for the design, manufacture and supply of bridges
and various changes took place to the design of the bridges between
the first and the second contracts and there were accordingly two claims
under the insurance policy.
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