Insurance and indemnity disputes are increasingly central to UK construction litigation. As projects grow in complexity and risk, contractors and developers are relying on layered insurance programmes—Construction All Risks (CAR), professional indemnity, public liability, latent defects cover—to protect against financial exposure.
But when claims arise, coverage is often contested. Disputes between contractors and insurers now routinely involve:
- Scope of coverage under CAR policies
- Triggering events and timing of damage
- Responsibility for post-handover defects or latent conditions
Policy Complexity: Endorsements, Exclusions, and Ambiguity
Construction insurance policies are notoriously complex. They often include:
- Multiple endorsements and schedules
- Ambiguous exclusions and carve-outs
- Interlocking indemnity clauses across contracts and subcontracts
The challenge is compounded when policies span years, involve multiple brokers, or contain bespoke amendments. A single misinterpreted clause can derail a claim or trigger costly litigation.
AI-Assisted Review of Policy Language
Artificial intelligence is transforming how legal teams approach insurance disputes. AI-powered platforms can:
- Extract and compare key clauses across policies and endorsements
- Flag inconsistencies in coverage scope, exclusions, and deductibles
- Identify relevant communications between brokers, insurers, and contractors
This accelerates early case assessment, strengthens negotiation positions, and improves the defensibility of claims—especially in high-value disputes involving latent defects or professional negligence.
Faster, Defensible Outcomes = Reduced Project Risk
Delays in resolving insurance disputes can stall projects, trigger financing issues, and damage reputations. Legal tech enables:
- Rapid triage of policy documents and correspondence
- Consistent coding across privilege, responsiveness, and issue tags
- Audit trails that support enforcement, arbitration, or settlement
Strategic Implications for Legal Leaders
General counsel and heads of litigation in the construction sector must now treat insurance and indemnity disputes as strategic litigation risks. This means:
- Embedding AI into policy review and dispute workflows
- Partnering with providers who understand construction insurance structures
- Preparing for a future where digital defensibility is central to coverage resolution
Sources:
[1] K&L Gates: UK Appeal Court Provides Authoritative Guidance on Construction All Risks Insurance Policies[2] Kennedys Law: The UK Construction Sector – What’s on the Cards for 2025?
[3] My Commercial Lawyers: Construction Disputes in 2025 – What Contractors and Developers Need to Know