Reinstatement Under Physical Damage Policy: Implications For Insurers

Under the fire coverage provisions of a buildings insurance policy an insurer is likely to have the right to reinstate instead of paying a money indemnity. Where the insurer exercises that right and procures works pursuant to it, the effect will be to bring a building contract into existence. The implications for insurers are highlighted by the case of Domsalla v Dyason.

Following the destruction of his home by fire, the insured claimed on the property's buildings insurance cover. Insurers opted to reinstate and required the insured to enter into a building contract with the contractor, incorporating the JCT Minor Building Works (1998) standard form. A dispute arose concerning the contractor's performance and the insured's non-payment of interim payments. The case was referred to adjudication and the adjudicator found in favour of the contractor. The contractor brought a claim for summary judgment to