All the above excepted risks follow exclusions required by the insurance market.
Taken together they include most acts of organised violence, but not acts of malicious damage not involving “tumultuous” disturbance of the peace.
9. “IONISING RADIATIONS…AIRCRAFT AT…SUPERSONIC SPEEDS”. The wording of these excepted risks follows exclusions which are required by the insurance market. Radiation from instruments brought on site by the contractor is not excluded.
10. “CAUSE DUE TO USE OR OCCUPATION BY THE EMPLOYER…OF ANY PART OF THE PERMANENT WORKS”. This excepted risk again represents an exclusion common in All Risks insurance policies. It applies however temporary or minor the use may be, and whether or not the part of the works is certified complete. If the part of the works is certified complete the employer takes the risk of damage to that part from any cause, even if not due to his use (cl. 20 (1)). Despite these protections it is unwise from the point of view of the contractor as well as the employer for the employer to occupy or use the works without specially seeing to the insurance position—N. 3.
To fall on the employer, damage, etc., need no longer be “solely” due to this excepted risk as it must in the 4th edition—N. 5. See also cl. 31.
11. “FAULT DEFECT ERROR OR OMISSION IN THE DESIGN OF THE WORKS". The concept of design of the works in itself is quite far-reaching in scope. In a recent case:
Counsel for the employer conceded that if the arbitrator concluded that settlement of a sewer was not due to bad workmanship on the part of the contractor, it followed by simple process of elimination that the engineer’s design was the sole cause of a settlement that had taken place, in that ground conditions had rendered the engineer’s design unsuitable.
In this edition of the Conditions the limitation to “fault defect error or omission” in design has been added, but it is not clear that this change will confine the exception to negligent design:
Railway bridge being built to replace bridge built in 1897, which had been swept away by flood waters. Prismatic piers (similar to the original piers, but strengthened) specified in the design were overturned by a flood after exceptionally heavy rains.
Held: The damage was not covered by insurance which excluded “loss or damage arising from faulty design”. Faulty design did not involve any element of blameworthiness or negligence. The effective cause of the loss was the inadequacy of the piers to withstand the flood and it was irrelevant that the design was satisfactory according to the state of engineering knowledge at the time it was made.
However, the words of this excepted risk follow precisely the normal exclusion in insurance policies, so that the contractor should never have to pay for making good damage to the works due to the engineer’s design out of his own pocket; he should be entitled to recover either from his own insurers or from the employer for an excepted risk.
A contractor nevertheless may be out of pocket for consequential losses, for which he may seek a remedy elsewhere (N. 6).
If this excepted risk does extend to cases where there has been no negligence by the engineer, the employer has no remedy against anyone for damage in such a case—not against the engineer (or his indemnity insurers) nor the contractor. For special insurance by the employer see p. 363.
The relevance of the similar excepted risk in the 4th edition has not always been appreciated, for example in cases of damage to the works caused by corrosion due to the atmosphere and other cases of damage not due to some sudden accident.
It is of course important to notify insurers immediately of any possible claim.
In the case of negligent design, the engineer will be liable to the employer for the extra expense under this clause—p. 386.
To fall on the employer, damage need no longer be “solely” due to this excepted risk, as it must in the 4th edition (N. 5).