A recent Commercial Court case has reaffirmed the
well-established principles of policy construction. The case
also demonstrates that the courts may interpret the wording of
an exclusion clause strictly in insurers’ favour,
notwithstanding the insured’s arguments that such an
interpretation would be contrary to the commercial object of
the insurance cover.
A fire protection system was installed that failed to
operate when a fire broke out. The owners of the building
claimed against the fire protection engineer who had installed
the system. The claim was settled and proceedings brought
against the engineer’s insurers.
The claim against insurers failed. The judge held that it
fell within the terms of an exclusion clause, which stated that
the policy would not cover "any claim arising out of the
failure of any fire or intruder alarm switch gear control panel
or machinery to perform its intended
