MUNICH RE CAPITAL LTD V ASCOT CORPORATE NAME LTD

[2019] EWHC 2768 (Comm), Queen’s Bench Division, Commercial Court, Mrs Justice Carr, 25 October 2019

Reinsurance – Back-to-back cover – Duration of reinsurance – Period of cover for construction all risks policy extended – No extension of reinsurance – Whether reinsurance cover applied

By an Offshore Construction All Risks policy dated 10 February 2011 Munich Re insured Chevron against all risks of physical loss or damage to an oil and gas drilling facility to be installed in the Gulf of Mexico. The policy attached on 1 March 2011 and lasted until 30 September 2014 unless extended at terms and premiums agreed. There was a one-year maintenance period running from the expiry of the project period, during which damage arising from faulty or defective workmanship, construction, material or design was covered by the insurance. Munich Re reinsured with Ascot on matching terms. Munich Re agreed to extend the project period until 30 September 2015, but no corresponding extension was sought for the reinsurance. Damage arising from defects occurred in May 2015. Munich Re paid the claim and sought indemnification.