A contractor was undertaking demolition and refurbishment works at three 18th century properties. Two of these were to be demolished and rebuilt while the third was to be underpinned and refurbished.
A JCT 21.2.1 policy was issued in the name of both the employer and contractor.
In the property being refurbished, plaster was removed from a section of brickwork and shortly after this a section of brickwork actually fell out of the chimney. Cracks developed and after two weeks, damage was at such a level that a Dangerous Structure notice was served, resulting in a requirement for demolition of the property.
The advice of expert engineers was sought, and the opinion was that collapse was inevitable, although this could not have been reasonably foreseen. Therefore, indemnity was provided under the JCT 21.2.1 policy.
The total claim payment was £993,903 including £7,402 expenses. The damages included £500,000 for demolition works and £393,000 building work.
The premium paid to RSA for the JCT 21.2.1 cover was £5,500