Last week, the UK's Supreme Court gave a decision by the
closest of margins (3 to 2) which will have significant
implications for Middle East projects where the parties have agreed
a common approach to insurance. The Court held that even where one
party is in breach of a clear warranty, if the parties have agreed
to take out common or joint names insurance for the benefit of
both, they cannot then claim against each other in respect of an
insured loss. That was not surprising. But, the court went on to
consider the position where the loss had been caused by a
sub-contractor who was not a co-insured. It held that a negligent
sub-contractor may escape liability for damage caused to the
employer, as the main contractor has no claim to pass down the
chain. While the case arose in the world of shipping, as the court
pointed out "the business context in which this has most
commonly arisen is the co-insurance of employer, contractor and
subcontractors under standard forms of
