Quick update from LEG for you;
The London Engineering Group (LEG) has published its first three new model clauses since it affiliated to the International Underwriting Association (IUA). The new clauses provide different levels of cover for physical damage caused by a defect in insured property. They were formally launched recently (November 9) at a presentation in the Lloyd’s Old Library.
LEG was established as an independent organisation for insurers covering engineering risks in 1984. In July of this year, it became a part of the IUA which represents more than 80 London insurance market companies and runs market groups across a wide range of other business classes.
Charlie Dee, UK Construction Underwriting Manager at Berkshire Hathaway Specialty Insurance and Chair of LEG said: “The LEG defect exclusions have been widely used across international construction and operational insurance markets for many years. This update is the result of extensive work to provide greater clarity around their intended operation.
“It aims to ensure their underlying intent remains the same, but that they are relevant to the way construction risks are insured today. We hope the new clauses and accompanying commentary will provide a clear and practical framework for insurers, brokers and clients.”
The three clauses have been issued with the support of the IUA Clauses Committee, a body of more than 80 London Market wordings experts that reviews all IUA model policy wordings. LEG 1/26 is an absolute exclusion for damage caused by a defect; LEG 2/26 excludes the cost that would have been incurred to replace or rectify the defective property had the defect been discovered; LEG 3/26 excludes the additional cost of improving the material, workmanship, design, plan or specification used for the defective property.
The clauses, together with an accompanying explanatory commentary are available from the IUA’s clauses database at iua.co.uk/clauses.
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