Here the Court of Appeal considered the distinction between public liability and product liability under an all risks policy.

The case arose after a crane collapsed, seriously injuring the crane driver and causing significant damage to nearby properties. Adana had constructed the crane base, which sat on top of four piles. Dowels created a connection between the piles and the crane base.

Adana notified its insurer, Aspen, after the crane collapse.  Aspen maintained that the base was a 'Product', and therefore a provision in the public liability section of the policy which excluded damage caused by a 'Product' applied. It also argued that liability arose from the failure of the product to fulfil its function, which was also excluded from cover under the policy. It sought a declaration from the court to that effect, but the court declined to make such a declaration so the matter was appealed.

The Court of Appeal agreed with the first instance decision that the crane base was not a 'Product' as defined by the policy. The dowels which Adana had supplied were products within the meaning of the policy, but they had not failed in their function as they had pulled out of the piles intact. Any liability was therefore a result of defective installation of the dowels which would be covered by the public liability part of the policy.

The case confirms therefore that where a Product fails due to defective workmanship rather than a defect in the product itself, the public liability, rather than product liability, section of a combined policy will cover it.

To view the full text of the decision, please click here.