Joint-Named Insurance

Considering the allocation of risk is crucial when drafting

construction and project agreements. Often, insufficient attention

is paid to ensuring the prescribed insurance covers are appropriate

to the respective parties' risk exposures. When obtaining

joint-named insurance the consideration of the allocation of risk

as set out in the contracts' indemnities and liabilities

provisions is very important.

Historically, the courts have not allowed an insurer to pay out

to insured party A and then exercise subrogation rights in order to

recover from insured party B. At one time the basis of this rule

was "circuity" as it was thought that insured party B

would then be entitled to an indemnity under the insurance. In

Co-operative Retail Services Limited v. Taylor Young

Partnership Limited [2002] 1 WLR 1419 ("the CRS

Decision") the House of Lords stated (obiter) that the basis

of the 'rule' was found, not in the principle of circuity,

but in the underlying construction/project...