The judgment states that it does not in itself affect the interpretation of a construction insurance policy whether the company has followed the so-called "model conditions" or left the coverage dependent on other principles, including that the common coverage exception for defective design, defective workmanship, etc. is linked to the distinction between direct and indirect damage and not, for example, primary and secondary damage. Nor does it affect the interpretation if the exclusion of coverage is not only related to the structural element in question, but - as in this case - to the entire direct damage.

The judgment also states that a limitation of the insured risk, such as that set out in the construction insurance in question, must be regarded as an objective risk limitation and not as a safety regulation. Nor is there any evidence to suggest that FAL §§ 18 and 20 limit the scope of the exclusion of coverage to gross negligence.

Furthermore, the judgment states that the choice of an incorrect working method and the resulting damage must be included in the concept of "defective workmanship".

Finally, the court found that the concept of "direct damage" included all the damage to the construction object caused by the water from the wet cutter (the incorrect working method). Thus, no restrictive interpretation of this concept was applied.

I am, of course, happy to answer any questions you may have about the new ruling.

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