Water damage at the Erasmus Medical Centre, which occurred after the 2004 refurbishment, was only covered under buildings insurance and not under CAR insurance because the contract documents did not include a maintenance obligation for the main contractor. What was agreed in the dealings between the main contractor and the subcontractor was not deemed relevant.

From this Article 81, a ruling related to the Dutch Judiciary (Organisation) Act’, of the Supreme Court of 23 June 2017, it is clear that the Amsterdam Court of Appeal correctly ruled that the recourse based on concurrence pursuant to Book 7, Section 961 of the Dutch Civil Code could not succeed.

Concurrence (multiple insurance)

If there is more than one insurance (i.e. concurrence), the insurance company that paid compensation is entitled to claim the compensation for the claim, and the costs incurred for the handling the claim, from the insurance company who covered the same interest.

Most discussions about concurrent insurance focus on the interpretation of the so-called ‘non-contribution clauses’ that are used to determine which insurance company should ultimately pay which part of the claim. Since the Supreme Court ruling of 27 February 1998 (not published on www.rechtspraak.nl, but published in the Dutch Law Reports 1998, 764 with an annotation from Mendel), it is clear that a non-contribution clause with a so-called ‘think away turnaround’ is deemed to be ‘hard’ and all other clauses are considered ‘soft’. See also this Supreme Court ruling of 13 January 2006, which attempted to include an intermediate alternative under the term ‘hard’, but to no avail.

On the subject of some other discussion points, in this Supreme Court ruling of 17 November 2006 (Europeesche/Zorg en Zekerheid) it was ruled that the insurer against whom the claim is made cannot rely on the fact that the claim notification under its insurance was submitted late. Furthermore, the Supreme Court ruled in that judgement that the insurer against whom recourse is being sought must follow the decision of the first insurer against whom the claim was made regarding the level and the manner of the payment, as long as that claims settlement can withstand the test of an insurance company acting reasonably.

The preliminary question, i.e. whether concurrence does indeed apply, is not addressed as frequently in case law. For an example of this, see this Supreme Court ruling of 11 July 2014, which ruled that the defence that there is no cover due to non-disclosure (under old law) when taking out two insurance contracts is relevant in the context of whether multiple insurance applies.

Article 81 of the ruling of 23 June 2017, a ruling related to the Dutch Judiciary (Organisation) Act.

This Supreme Court ruling of 23 June 2017 is relevant, despite the fact that the Supreme Court did not express a substantive opinion on the case – on the advice of the Advocate General in this conclusion – but instead relied on Article 81. This means that the Supreme Court was of the opinion that the complaints advanced by the buildings insurer could not lead to an appeal in cassation, nor did they call for addressing legal issues in the interests of uniformity of law or developments in the law.

In other words, the Supreme Court upheld the Amsterdam Court of Appeal’s ruling of 23 February 2016 (view here) without giving reasons.


In 2004, the Erasmus Medical Centre engaged Takenaka as the main contractor to carry out the renovations on the 15th floor of one of its buildings. A warranty period was included in the contract documents.

Takenaka entered into a subcontract with Wolter & Dros, inter alia in connection with fitting an air conditioning system and associated installation work. A defects liability period was included in that contract.

The renovations were completed on 1 October 2004. On 18 August 2005, water damage was discovered on the 15th floor. An investigation revealed that a flexible hose from the air conditioning system had been damaged because its metal sheath had corroded.

The Erasmus Medical Centre had a buildings insurance policy with Chubb et al., as well as continuous coverage under construction all risk insurance, a.k.a. CAR insurance, with Amlin et al.

Both insurance companies were notified of the claim. Chubb et al. picked up the gauntlet and compensated Erasmus Medical Centre for the damage, a claim that amounted to more than one million euro. Chubb et al. subsequently claimed damages against Amlin et al. on the ground of multiple insurance pursuant to Book 7, Section 961 of the Dutch Civil Code, arguing that a primary cover clause had been included in the CAR insurance policy conditions, on the grounds of which the CAR insurance should take precedence.

CAR insurers position: no cover under CAR, so no concurrence

The CAR insurers argued, however, that this case did not constitute a concurrence of insurance cover because no defects liability period had been included in the policy for this work. In the process, they referred to a letter dated 24 November 2003 in which they explicitly stated that they were not willing to cover the 12-month defects liability period, irrespective of the contract documents. In that letter, the CAR insurers explicitly stated: ‘We are restricting this term to the one agreed in the contract documents, up to a maximum of 12 months.’

Question to be answered: was a defects liability period agreed?

The parties agreed that this kind of work is automatically covered by the CAR insurance policy. The insured period in any event covers the construction period and, if insured, the defects liability period. In this case, the damage became evident after the insured construction period, and so it is only covered if the defects liability period is also covered. And that in turn is only automatically the case if a defects liability period has been agreed in the contract documents for the work in question.

First instance: evidence of the main contractor’s maintenance obligation

In the first instance, Chubb et al. was admitted to give in evidence that Erasmus Medical Centre and the main contractor, Takenaka, had agreed a defects liability period.

The District Court ruled that Chubb et al. failed to do so because they had only agreed a warranty period, and that is not the same as a defects liability period.

Aside: the difference between a warranty period and a defects liability period

A warranty period means that a contractor must guarantee the work that it performs and that contractor is liable for hidden and other defects by virtue of the law or the contract for a certain period of time.

A defects liability period is the term after completion of the work during which the contractor must rectify any defects discovered in the work and/or the contractor undertakes to carry out maintenance work.

Appeal proceedings: is the subcontractor’s maintenance obligation relevant?

In the appeal proceedings, Chubb et al. advanced that the Court had wrongly disregarded the fact that a defects liability period had been included in the subcontract between Takenaka and Wolter & Dros. Chubb et al. argued that the Court ought to have taken this into account since the main contractor and the subcontractors were also included under the CAR insurance policy.

The Court of Appeal did not uphold the position taken by Chubb et al. because, in the context of a claim for recourse due to concurrence in the insurance cover, it is not relevant that the CAR insurance is also intended to cover the interests of third parties other than the Erasmus Medical Centre. Therefore the issue of whether Takenaka and/or Wolter & Dros could claim under the CAR insurance is also not relevant. The Court of Appeal ruled that the case did not constitute concurrence.

Findings of Advocate General Valk

In his opinion in the Supreme Court ruling of 23 June 2017, Advocate General Valk pointed out that the insured interest of Takenaka and Wolter & Dros is a liability interest, and that Erasmus Medical Centre has an insured interest in the object, on the grounds of which there can be no concurrence.

Only if the Erasmus Medical Centre had insured its interest in the property under the buildings insurance as well as under the CAR insurance would it constitute multiple insurance.

And that in turn could only be the case if the Erasmus Medical Centre had agreed the defects liability period in the contract documents with the main contractor.

On appeal in cassation, Chubb et al. stated that it did not rely on the main contractor and the subcontractor being included under the CAR insurance policy in the context of the insured interest, but that they only intended to point out that their contractual agreements are indeed of interest when answering the question of whether a maintenance obligation had been agreed (which would then have been covered by the defects liability period of the CAR insurance policy). This argument seems to have been disregarded. Advocate General Valk had only indicated in general terms that in his view Chubb et al. had failed to satisfactorily explain why the fact that other parties agreed on a defects liability period was relevant, in the light of the letter of 24 November 2003 from the CAR insurers that the defects liability period must be included in the contract documents.


The Supreme Court therefore disposed of the case without giving reasons and upheld the opinion of the Court of Appeal, namely that the case did not involve multiple insurance because in this case no defects liability period was covered by the continuous CAR insurance.

Buildings insurer Chubb et al. are therefore required to cover the entire claim.

Article by Annet van Duijn, lawyer Liability, damage/loss & Insurance