Cavan-based insulation board company sues insurer for €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 the value of claims already notified to it exceeds €6.5 million and contends it is entitled to an indemnity, subject to a limit of €6.5million.

It 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 London-based insurers/underwriters Brit UW Ltd has wrongfully refused to provide an indemnity under the product liability cover of its contracts liability insurance.

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On Monday, the case was admitted on consent to the Commercial Court 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 German company, Bayer AG, and which was subsequently purchased from Dutch firm Covestro BV following reorganisation within the Bayer group.

Affidavit

In an affidavit, Ballytherm director, Brendan Cosgrove, said the company was notified in March 2016 about cracking and associated damage in 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 that 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 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 €6.5 million and that it is essential the matter be resolved as quickly as possible.

The value of claims already notified exceeds €6.5 million, he added.