Contractors third party liability cover
took the lives of four workers. The cause of the failure was investigated and found to be attributable to the system used to construct the windshield and flues. The construction process, known as ‘sliding shuttering’, was achieved by the pouring of concrete into shuttering which is moved in an upward motion during the process. What was not appreciated was that the lifting effect of the shuttering was causing voids (honeycombing) in the concrete. These were not visible as the outer skin had the appearance of perfectly formed concrete. This skin had camouflaged the serious defects in the wall. Insurers accepted the claim and options were considered to save the chimney. One of these was to construct outer shells on the flues and the windshield. This option was finally scrapped and the insurers brought in an expert to demolish the chimney. This was to be done by way of blasting a specific area of the lower section of the structure. The intention was that the chimney would fall in a predetermined direction. A berm was even dug to contain the debris expected to result from the chimney crashing down onto the ground. When the explosives were detonated, to the surprise of all involved, the chimney did not fall on its side. It merely crumbled downwards, as an imploded building does, but was rebuilt at the insurer's cost During the 1970s, ISCOR contracted with various contractors to build a railway line from Sishen iron ore mine to Saldanha Bay and a breakwater in Saldanha Bay. The purpose of this venture was for the iron ore, mined at Sishen (inland), to be exported, via bulk orecarrying ships, out of Saldanha harbour. On the CAR side, many claims were made for damage to free issue materials. However, from a liability perspective, the interesting claim was that of damage to a local hotel and the naval base, caused by wave action. In order to protect the Saldanha harbour from aggressive wave action, it was necessary to build an artificial breakwater. This breakwater took the form of an 1 800 metre long sand dam stretching from Marcus Island to Hoedjes Point. The breakwater was constructed of sand, dredged from the bottom of the bay and relocated between the two points mentioned above. During the course of the contract the consortium contracted to build the breakwater ceased work as a result of a dispute with the principal. This stoppage resulted in the sand at the end of the incomplete breakwater forming, what an expert described as a ‘pannekoek’. This is a bulbous formation. The result of this ‘pannekoek’ was that the wave action of the Atlantic Ocean was deflected from the natural path, and caused damage to the local hotel and the naval base. Both of these claims were entertained by the liability insurers and settled. Despite the fact that some policies have a cessation of work exclusion, this policy did not. The importance of this clause is illustrated above. It is therefore critical that brokers and insureds alike are aware of any such cessation of work exclusion, given the resulting additional exposure to the insured.