The London Engineering Group has published three new model clauses, which provide different levels of cover for physical damage caused by a defect in insured property. LEG was established in 1984 and in July this year became part of the International Underwriting Association.

Charlie Dee, UK construction underwriting manager at Berkshire Hathaway Specialty Insurance and chair of LEG, said: “The LEG defect exclusions have been widely used across international construction and operational insurance markets for many years. This update is the result of extensive work to provide greater clarity around their intended operation.

“It aims to ensure their underlying intent remains the same, but that they are relevant to the way construction risks are insured today. We hope the new clauses and accompanying commentary will provide a clear and practical framework for insurers, brokers and clients."

LEG 1/26 is an absolute exclusion for damage caused by a defect; LEG 2/26 excludes the cost that would have been incurred to replace or rectify the defective property had the defect been discovered; LEG 3/26 excludes the additional cost of improving the material, workmanship, design, plan or specification used for the defective property.