{
  "id": "clause-defects-exclusion-leg-de",
  "type": "clause",
  "languages": {
    "en": {
      "id": "clause-defects-exclusion-leg-de",
      "lang": "en",
      "type": "clause",
      "title": "Defects Exclusion (LEG 1/2/3, DE 1–5)",
      "shortDefinition": "The defects exclusion clauses (London Engineering Group LEG 1–3 and Defective Condition DE 1–5) define the extent to which loss or damage caused by defective design, materials or workmanship is excluded from construction and erection all-risks cover.",
      "synonyms": [
        "LEG Clauses",
        "DE Clauses",
        "Faulty Workmanship Exclusion"
      ],
      "linesOfBusiness": [
        "Engineering"
      ],
      "jurisdictions": [
        "Global"
      ],
      "tags": [
        "Construction and Erection Insurance",
        "Exclusion",
        "Defective Workmanship"
      ],
      "relations": {
        "relatedTerms": [],
        "partOf": [],
        "appliesTo": [
          "cov-maschinenversicherung",
          "cov-car-ear"
        ],
        "regulatedBy": [],
        "relevantFor": [],
        "insurableVia": [],
        "mitigatedBy": [],
        "comprises": [],
        "alternativeTo": [],
        "complementedBy": []
      },
      "attribute": null,
      "profile": null,
      "coverageProfile": null,
      "clause": {
        "kind": "exclusion",
        "origin": "international-programme",
        "favours": "insurer",
        "negotiability": "negotiable",
        "standardWordings": [
          "LEG 1/96",
          "LEG 2/96",
          "LEG 3/06",
          "DE 1/95",
          "DE 4/95",
          "DE 5/95"
        ]
      },
      "legalBasis": [],
      "standards": [],
      "reviewStatus": "expert-reviewed",
      "reviewedBy": "Guido Hesse, Hesse Group Holding AG",
      "lastReviewed": "2026-09-04",
      "version": "0.1.0",
      "updated": "2026-09-03",
      "generated": {
        "by": "cursor-agent/claude-sonnet-5",
        "at": "2026-09-03T00:00:00.000Z"
      },
      "verified": [
        {
          "by": "human:ghesse",
          "at": "2026-09-04T00:00:00.000Z",
          "method": null
        }
      ],
      "staleAfter": null,
      "url": "https://hgh.ch/lexikon/en/knowledge/clause/defects-exclusion-clause-leg-de/",
      "alternateUrl": "https://hgh.ch/lexikon/de/wissen/klausel/defects-exclusion-leg-de-klauseln/",
      "body": "## Purpose\n\nAll-risks policies for construction and erection risks (CAR/EAR) are intended to cover sudden, unforeseen physical damage, not the cost of defective design, materials or workmanship as such – that risk is addressed through warranty and contract law against designers and contractors. The defects exclusion clauses developed in the London market (the LEG series of the London Engineering Group, and the older DE series) set out, in graduated form, how narrowly or broadly this exclusion is drawn.\n\n## Effect and limits\n\nThe narrowest, \"outright\" version (LEG 1/DE 1) excludes all loss or damage arising from a design, material or workmanship defect, including consequential damage to defect-free parts. The \"consequences\" version (LEG 2, broadly corresponding to DE 3/DE 4) excludes only the hypothetical cost that would have been needed to remedy the defect before the damage occurred, while covering resulting damage to defect-free property. The broadest version (LEG 3, corresponding to DE 5) covers both the defective item and all consequential damage, excluding only the cost of improving on the original defective design.\n\n## Negotiation and practice\n\nBecause the three tiers imply materially different retained cost for the project owner, policyholders on complex projects often negotiate the ability to select between several defects clauses after a loss has occurred (\"post-loss selection\"), to obtain the most favourable interpretation in the specific case. Courts have repeatedly clarified the boundaries between the versions, so the precise wording chosen needs careful review in each case."
    },
    "de": {
      "id": "clause-defects-exclusion-leg-de",
      "lang": "de",
      "type": "clause",
      "title": "Defects Exclusion (LEG 1/2/3, DE 1–5)",
      "shortDefinition": "Die Defects-Exclusion-Klauseln (London Engineering Group LEG 1–3 bzw. Defective Condition DE 1–5) grenzen ab, in welchem Umfang Schäden infolge fehlerhafter Planung, Konstruktion, Werkstoffe oder Ausführung von der Bau- und Montageversicherung ausgeschlossen bleiben.",
      "synonyms": [
        "LEG-Klauseln",
        "DE-Klauseln",
        "Konstruktionsfehler-Ausschluss"
      ],
      "linesOfBusiness": [
        "Technische Versicherung"
      ],
      "jurisdictions": [
        "Global"
      ],
      "tags": [
        "Bau- und Montageversicherung",
        "Ausschluss",
        "Konstruktionsmangel"
      ],
      "relations": {
        "relatedTerms": [],
        "partOf": [],
        "appliesTo": [
          "cov-maschinenversicherung",
          "cov-car-ear"
        ],
        "regulatedBy": [],
        "relevantFor": [],
        "insurableVia": [],
        "mitigatedBy": [],
        "comprises": [],
        "alternativeTo": [],
        "complementedBy": []
      },
      "attribute": null,
      "profile": null,
      "coverageProfile": null,
      "clause": {
        "kind": "exclusion",
        "origin": "international-programme",
        "favours": "insurer",
        "negotiability": "negotiable",
        "standardWordings": [
          "LEG 1/96",
          "LEG 2/96",
          "LEG 3/06",
          "DE 1/95",
          "DE 4/95",
          "DE 5/95"
        ]
      },
      "legalBasis": [],
      "standards": [],
      "reviewStatus": "expert-reviewed",
      "reviewedBy": "Guido Hesse, Hesse Group Holding AG",
      "lastReviewed": "2026-09-04",
      "version": "0.1.0",
      "updated": "2026-09-03",
      "generated": {
        "by": "cursor-agent/claude-sonnet-5",
        "at": "2026-09-03T00:00:00.000Z"
      },
      "verified": [
        {
          "by": "human:ghesse",
          "at": "2026-09-04T00:00:00.000Z",
          "method": null
        }
      ],
      "staleAfter": null,
      "url": "https://hgh.ch/lexikon/de/wissen/klausel/defects-exclusion-leg-de-klauseln/",
      "alternateUrl": "https://hgh.ch/lexikon/en/knowledge/clause/defects-exclusion-clause-leg-de/",
      "body": "## Zweck\n\nAllgefahrenpolicen für Bau- und Montagerisiken (CAR/EAR) sollen unvorhergesehene physische Schäden decken, nicht aber die Kosten für von vornherein mangelhafte Planung, Werkstoffe oder Ausführung selbst – dafür bestehen Gewährleistungs- und Vertragsrecht gegenüber Planern und Unternehmern. Die im Londoner Markt entwickelten Defects-Exclusion-Klauseln (LEG-Reihe der London Engineering Group sowie die ältere DE-Reihe) definieren abgestuft, wie eng oder weit dieser Ausschluss gefasst wird.\n\n## Wirkung und Grenzen\n\nAm engsten wirkt die «Outright»-Fassung (LEG 1/DE 1): Sie schliesst sämtliche Schäden aus, die auf einem Konstruktions-, Material- oder Ausführungsfehler beruhen, einschliesslich der Folgeschäden an mangelfreien Bauteilen. Die «Consequences»-Fassung (LEG 2, sinngemäss DE 3/DE 4) schliesst nur die hypothetischen Kosten aus, die zur Behebung des Mangels vor Schadeneintritt angefallen wären, deckt aber den durch den Mangel ausgelösten Folgeschaden an mangelfreien Teilen. Die weiteste Fassung (LEG 3, sinngemäss DE 5) deckt sowohl den mangelhaften Teil als auch alle Folgeschäden und schliesst lediglich die Kosten einer Verbesserung gegenüber der ursprünglich mangelhaften Planung aus.\n\n## Verhandlung und Praxis\n\nDa die drei Abstufungen erheblich unterschiedliche Selbstbehalte für den Bauherrn bedeuten, verhandeln Versicherungsnehmer bei komplexen Projekten häufig eine nachträgliche Wahlmöglichkeit zwischen mehreren Defects-Klauseln nach Schadeneintritt («post-loss selection»), um im Einzelfall die günstigste Auslegung zu erhalten. Gerichte haben die Abgrenzung zwischen den Fassungen wiederholt konkretisiert, sodass die genaue Wortwahl im Einzelfall sorgfältig zu prüfen ist."
    }
  }
}