An insurer has successfully capped its exposure at £1.5 million for a defective London apartment block after the High Court ruled that an aggregate limit applied across all seven flats.
The decision, handed down on January 16, resolves a dispute over how limits of indemnity operate when multiple residential units share a single structure.
Acasta European Insurance Company Limited brought the claim seeking clarity on its liability under a structural defects insurance policy covering flats at 53 Agar Grove in Camden. Defects had emerged in 2019 after water began seeping into the building - the result of mortar with the wrong strength and density being used in the outer brickwork.
The property owners argued that each of the seven flats carried its own £1 million limit, pointing to the fact that separate Insurance Period Certificates had been issued for each unit. Their position, if accepted, would have increased the insurer's potential payout.
Acasta countered that the policy language was clear: while individual flats were subject to a £1 million cap, a separate provision imposed an overarching £1.5 million ceiling for all residential properties within one continuous structure.
That provision read: "The limit for all claims for all Residential Property's in one continuous structure is £1,500,000."
Deputy High Court Judge Philip Marshall KC sided with the insurer. He found the apostrophe in "Property's" was simply a typo - intended to read "Properties" - and that the clause plainly established an aggregate limit.
The judge reasoned that an aggregate cap made commercial sense for properties sharing the same location and likely to be affected by the same defect. He noted the contrast with a recent Court of Appeal case, Liberty Mutual v Bath Racecourse, where separate limits applied because the insured businesses were miles apart and operated in very different circumstances.
Marshall KC also pointed to the numbers. The stated rebuild cost for the entire development was £1.4 million, making an aggregate limit of £1.5 million - with index-linking built in - consistent with the policy structure.
The defendants in the case included individual leaseholders and freeholder Prime Metro Properties (UK) Ltd. Crescent Moon Properties Ltd, also named as a defendant, appeared without legal representation.
The court will hear submissions on costs and any other consequential matters if the parties cannot reach agreement.
For insurers and brokers handling structural defects cover on multi-unit developments, the ruling confirms that courts will uphold aggregate limits where policy language links multiple properties within a continuous structure - even when separate certificates are issued for each unit. Clear drafting of limit of indemnity clauses remains essential, particularly when insuring interconnected residential properties exposed to common risks.
