BRIT UW LTD V F & B TRENCHLESS SOLUTIONS LTD

[2015] EWHC 2237 (Comm), Queen's Bench Division, Commercial Court, Mrs Justice Carr, 31 July 2015

Insurance (contractors combined liability) - Non-disclosure and misrepresentation - Materiality - Inducement - Affirmation

FBTS was a specialist tunnelling contractor, constructing micro-tunnels. It obtained a contractors combined liability policy from Brit in August 2013. On 27 August 2013 a freight train pulling wagons loaded with a cargo of diesel derailed when passing over a level crossing beneath which FBTS had constructed a micro-tunnel. The cause of the derailment was severe settlement of the railway tracks caused by a void in the ground underneath. Brit purported to avoid the policy on two grounds: FBTS failed to disclose substantial and progressive earth settlement and a void which occurred in July and early August 2013 at the site; and FBTS made a material misrepresentation to Brit, namely that FBTS did not carry out (and would not in the future carry out) tunnelling works on railway lines which were active, alternatively, that FBTS failed to disclose to Brit the fact that the railway line crossing the site had been active during FBTS' tunnelling works.