Cavan insulation board manufacturer Ballytherm sues insurer over damage claims refusal; claims already exceed €6.5m

A company manufacturing underfloor insulation boards is suing its insurer over an alleged refusal to indemnify it for claims arising out of shrinkage of its product.

Ballytherm of Ballyconnell, Co Cavan, says it is facing claims for damage to properties due to the shrinkage which it says is significantly due to a change in a chemical blend a Dutch firm supplied for making the boards.

Ballytherm claims insurers/underwriters Brit UW Ltd, Leadenhall Street, London, has wrongfully refused to provide an indemnity under the product liability cover of its contracts liability insurance.

The case was admitted on consent to the Commercial Court today by Mr Justice Robert Haughton.

The firm manufactures rigid polyisocyanurate (PIR) insulation boards used in the construction of residential and commercial properties.

It makes the boards with a chemical blend which previously had been bought from a German company, Bayer AG, and which was subsequently purchased from Dutch firm Covestro BV following reorganisation within the Bayer group.

Ballytherm director, Brendan Cosgrove, in an affidavit, said in March 2016, the company was notified about cracking and associated damage in a number of residential dwellings constructed by a building firm which had used the boards in underfloor insulation.

While it was initially suspected this was due to an infill product beneath the insulation, some queries arose about the structural integrity of the boards, he said. Subsequently, Ballytherm received a number of similar notifications from others who had the boards installed in their properties.

Mr Cosgrove said, following investigations, his company discovered a change in the chemical blend supplied by Covestro, between November 2014 and February 2016, may have been "a significant factor" in the shrinkage of the boards.

Mr Cosgrove said only a small proportion of the boards manufactured during that period appeared to manifest problems.

Ballytherm provided its Brit UW with a list of the parties who were claiming over damage but the insurer refused to provide an indemnity, he said.

Mr Cosgrove says the firm is entitled to an indemnity, subject to a limit of €6.5m.

It was essential that the matter is resolved as quickly as possible, he said.

The value of claims already notified exceeds €6.5m, he said.