ARTICLE · 04 SEPTEMBER 2009

Confirmed - Contract Works Insurance Policy Is Not A Construction Contract

Norton Rose Fulbright Australia

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We reported on the attempt by a design and construct contractor to use the Building Industry Security of Payment Act 1999 to obtain a progress payment under a Construction Risks Insurance Policy.

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Wesley Rose

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In the December 2008 edition of the Deacons Insurance Update, we reported on the attempt by a design and construct contractor to use the Building Industry Security of Payment Act 1999 (Act) to obtain a progress payment under a Construction Risks Insurance Policy (Policy). The case involved the Thiess John Holland Joint Venture (TJH), the contractor engaged to construct the Lane Cove Tunnel, and its Construction Risks insurers Zurich Specialties London Ltd and Swiss Re International SE (Insurers).

On 16 September 2008, the Insurers commenced proceedings in the Supreme Court seeking, among other things, a declaration that the Policy was not a construction contract for the purpose of the Act. At first instance the Insurers succeeded, Bergin J rejecting TJH's argument that clause 18 of the Policy created a construction contract between TJH and the Insurers separate to the contract of insurance.

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