NOVE represented the insurer in a dispute related to professional liability cover of the designer

NOVE successfully represented the insurer (If P&C Insurance) in a dispute with policyholder (professional designer) and contractor Skanska for rejecting claims under professional liability cover of the designer.

The dispute started from “yellow FIDIC” based design-and-construction contract for reconstruction of wastewater treatment plant of a city. The dispute focused on a division of liability between different subcontractors for defects of a tank, planned to complicated geotechnical conditions. The shortcomings were detected already in ground investigations, project management as well in geotechnical design and construction works. Therefore the question of applicability of professional liability cover to this complex bundle of shortcomings was raised. In the case courts handled the risks which may arise due to the nature of construction-and-project management contracts, which contain grounds for conflict of interests. Courts held that insurers may include industry-specific exclusions to their standard terms of professional liability products. The Supreme Court agreed with lower courts in its judgment No 3-2-1-131-16.

Case was handled by attorney-at-law Andrus Kattel, the part of underlying geotechnical design and specific engineering and construction works related issues was supported by attorney-at-law Kristjan Tamm.