Sky UK Limited and another (Respondents) v Riverstone Managing Agency Limited and others (Appellants)

Case summary

Case ID

UKSC/2025/0026

Parties

Appellant(s)

Riverstone Managing Agency Limited & Others

Respondent(s)

Sky UK Limited

Mace Limited

Issue

In summary, did the Court of Appeal err by holding that: (1) Insurers are liable for post-Period of Insurance losses; (2) The insurers’ primary obligation is to prevent the occurrence of an insured event. (3) The insurers breached their contracts with Sky by their failure to prevent water entering the cassettes and damaging the timbers.

Facts

This is a case about a leaky roof. Between 2014 to 2016, the construction of Sky UK’s headquarters commenced, involved the largest timber flat roof in Europe, comprising 16,000 metres squared. The construction work was covered by a Construction All Risks policy of insurance, to “indemnify the Insured against physical loss or damage to Property Insured occurring during the Period of Insurance from any cause whatsoever”. Mace, the main contractor, failed to provide a protective temporary roof during construction resulting in the timber being exposed to rainfall, and deteriorating. The remedial works will not be completed until 2029. Sky claimed an indemnity for all damage suffered, including the damage occurring after the Period of Insurance (“PoI”), and the costs of investigating the extent of the damage which had occurred to date. The insurers contended that Sky was not entitled to any cover for damage which occurred after the PoI. HHJ Pelling KC in the High Court found: (1) that the timber has suffered physical damage within the meaning of the policy; (2) that the policy only covered damage as it existed at the end of the PoI; (3) that the policy entitled the insured to costs insofar as the investigation revealed physical damage that occurred during the PoI; (4) that the insured was only required to pay £150,000 for any damage resulting from the same cause of damage, and not for each individual damage itself. On appeal by both parties, the Court of Appeal found in practice all decisions in favour of the claimant, specifically on each issue it: (1) upheld the decision that physical damage to the property impaired its value; (2) overturned the decision, finding Sky was entitled costs of remedying foreseeable deterioration; (3) upheld the decision that the insured were entitled to costs reasonably incurred as part of investigations; (4) upheld the decision that only the cause of damage needed to be considered an event. The Appellants appeal this decision.

Date of issue

13 February 2025

Case origin

PTA

Back to top