For years, many construction groups operated on the assumption that separate legal entities created a practical barrier between one company’s liabilities and the rest of the group. A contractor, project company or supplier could carry out the work, while valuable assets and wider trading activity sat elsewhere.
That assumption is becoming much less reliable.
Two recent cases discussed in the 29 July 2026 update from Burges Salmon show how Building Liability Orders, or BLOs, are giving the courts a wider route to reach associated companies. The cases concerned an insolvent contractor, an unpaid £14.9 million adjudication award and a German parent company connected to a UK subsidiary.
For contractors, developers and corporate groups in Essex, Kent and London, this is not simply a legal development. It is an insurance wake-up call. Your Construction Contractor Insurance needs to be reviewed against the way your group actually operates, not just against the name on a single policy schedule.
What is a Building Liability Order?
Section 130 of the Building Safety Act 2022 allows the High Court to make a Building Liability Order where it considers this “just and equitable”.
In practical terms, a BLO can make a relevant liability of one company also become the liability of one or more associated companies. Those companies may include:
- Parent companies
- Subsidiaries
- Sister companies
- Other companies associated during the relevant period
- In suitable circumstances, an overseas parent company
The relevant liability may arise under the Defective Premises Act 1972, section 38 of the Building Act 1984, or from a building safety risk involving fire spread or structural failure.
The companies caught by the order can become jointly and severally liable. This means a claimant may pursue the company with the strongest balance sheet, rather than being limited to the original contractor that carried out the work.
It is important to be precise here. A BLO does not mean that every company in a group automatically becomes responsible for every defect. The court must consider the facts and apply the “just and equitable” test. However, the direction of travel is clear: a corporate structure will not necessarily protect a wider group where it would leave building safety liabilities in an insolvent or asset-light company.
Crest Nicholson v Ardmore: liability can spread before trial
The first major case is Crest Nicholson Regeneration Ltd v Ardmore Construction Ltd & Ors.
Ardmore was the design and build contractor for a development in Portsmouth. Investigations identified fire safety defects affecting external walls. Crest pursued Ardmore through adjudication and obtained an award of approximately £14.9 million, including liabilities connected with the Defective Premises Act.
Ardmore entered administration shortly before the adjudicator’s decision, and the award remained unpaid. Crest then applied for BLOs against companies in the wider Ardmore group.
The Technology and Construction Court granted both an anticipatory BLO and an adjudication BLO.
Anticipatory BLOs
An anticipatory BLO can be made before the underlying liability has been finally determined at trial. A claimant does not necessarily have to wait until every part of the main proceedings has concluded before seeking to bring associated companies into the liability picture.
The court indicated that it would be more likely to grant such an order where it had a high level of confidence that a similar order would be made after trial. The purpose is practical: parties should know at an early stage whether group companies may be exposed, rather than allowing the corporate structure to remain an unanswered question until the end of lengthy litigation.
For a construction group, this creates an earlier point of pressure. It may affect settlement discussions, financing, company restructuring and the willingness of associated companies to participate in the underlying dispute.
Adjudication awards can support a BLO
The court also rejected the argument that an adjudicator’s decision was too temporary to count as a relevant liability.
Adjudication decisions are binding unless and until they are finally determined by litigation, arbitration or agreement. The court held that this temporary nature did not prevent the award from supporting a BLO application.
That matters because adjudication is one of the main dispute-resolution tools in the construction industry. A contractor cannot assume that an unpaid adjudication award will remain confined to an insolvent subsidiary while the wider group stands aside.
The decision is subject to appeal, with the Court of Appeal expected to provide further guidance in due course. Even so, the current judgment is a serious indication of how the courts may approach group liability.
Mullalley & Co v STO: overseas parents are not automatically outside the net
The second case, Mullalley & Co Ltd v STO Ltd and others, demonstrates the potential cross-border reach of BLOs.
Mullalley had been involved in cladding works that were later found to be defective. The UK supplier, STO Limited, entered administration. Mullalley then pursued STO’s German parent company under section 130 of the Building Safety Act.
The German parent did not defend the proceedings, and the court entered default judgment. Damages were later assessed, with the German parent held liable for a substantial proportion of the relevant loss.
This was a default judgment, so it does not answer every possible question about jurisdiction, enforcement or how a defended overseas claim would proceed. Nevertheless, the case confirms that the existence of an overseas parent does not, by itself, prevent a BLO application.
For groups with German, European or other international ownership, the message is straightforward: liability may travel across borders where the statutory requirements are met. A UK subsidiary with limited assets may not be the only company that needs to consider the consequences of a building safety claim.
Why the 30-year Defective Premises Act period matters
The Building Safety Act extended the limitation period for many Defective Premises Act claims relating to dwellings. For qualifying historic claims, the period can reach back 30 years, while the prospective period for newer work is generally 15 years.
That creates a long tail of potential exposure for construction businesses, developers, consultants and suppliers. A project completed many years ago may still require investigation, records and insurance analysis.
The Court of Appeal decision in URS Corporation Ltd v BDW Trading Ltd is important in this context. It confirmed that DPA duties can extend beyond traditional housebuilders and may apply to professionals, such as structural engineers, where they have taken on work connected with providing dwellings. It also addressed the operation of the extended limitation regime.
The combined effect is significant. More historic projects may remain within the limitation period, and more types of businesses may find themselves connected to a relevant liability. If an original company has since been dissolved, restructured or placed into administration, a BLO may still be considered where the statutory conditions are satisfied.
What does this mean for Construction Contractor Insurance?
A BLO is a legal mechanism, not an insurance policy. It does not automatically create cover, and it does not guarantee that a claimant’s costs will be met by insurance.
The key insurance question is whether the relevant liability is covered under the wording of the policy, for the entity that is being pursued, and under the correct notification and claims conditions.
Your review should consider at least the following.
1. Are all trading entities correctly named?
Do not assume that cover for the main trading company automatically extends to every subsidiary, parent or sister company. Check the definition of “insured”, the schedule and any subsidiary-company provisions.
A group structure may have changed since the policy was first arranged. Companies may have been acquired, sold, dormant for a period or used for particular developments. Those changes need to be disclosed and reflected where required.
2. Does the policy respond to the type of liability?
General Contractor Liability Insurance will commonly focus on public liability, products liability and employers’ liability. A policy may also include contract works, work away from premises and other extensions.
However, building safety claims can involve defective design, professional services, contractual responsibilities, remediation costs and long-established work. Public liability cover should not be treated as a universal answer. Policy exclusions, wording around defective work, pollution, contractual liability and known circumstances can all affect the outcome.
Professional indemnity insurance may also be relevant where design responsibility, consultancy or specified professional services are involved. The correct arrangement depends on the work your business undertakes and the obligations it accepts.
3. Have parent company guarantees and collateral warranties been reviewed?
Insurance is only one part of the risk-transfer structure. Parent company guarantees and collateral warranties may create obligations that sit alongside the main building contract.
A guarantee may give a developer or employer additional recourse if a contractor fails. A collateral warranty can create direct contractual rights for a funder, purchaser or building owner. These documents should be reviewed alongside your insurance programme so that the group understands what it has promised and where the policy may respond.
4. Are historic circumstances being disclosed?
With potential DPA claims reaching back 30 years, old projects and historic complaints matter. If the business is aware of defects, investigations, threatened claims, adjudication notices or remediation discussions, these may need to be disclosed to insurers before renewal or when seeking new cover.
The safest approach is to obtain advice early. Waiting until a company enters administration or a BLO application is issued may leave fewer options.
A practical review for contractors and group companies
I recommend that construction businesses take the following steps:
- Map the corporate group. Include current and historic parents, subsidiaries, sister companies, project companies and overseas owners.
- Identify who did what. Record which entity contracted, designed, supplied, supervised or carried out work on each major project.
- Review guarantees and warranties. Check whether parent companies or related entities accepted direct obligations.
- Check every insurance schedule. Confirm that all relevant entities and activities are properly described.
- Review policy triggers and exclusions. Pay particular attention to defective work, design, contractual liability, known circumstances and notification requirements.
- Preserve project records. Contracts, drawings, inspection records, certificates, correspondence and claims information may be important years later.
- Take legal advice on live disputes. BLOs are fact-sensitive, and insurance advice should be coordinated with construction and insolvency advice.
Moyak’s General Contractor Insurance Brokers team works with contractors, developers and other construction businesses to arrange cover around the actual risks of the business. Depending on your circumstances, this may include employers’ liability, public liability, products liability, contract works, hired-in plant, tools, goods in transit and failure to perform.
For businesses with wider premises, stock, income or liability exposures, Commercial Combined Insurance may also form part of a broader programme.
Conclusion
The latest BLO cases do not remove the separate legal personality of every company. They do, however, show that courts are prepared to look beyond a single contracting entity where building safety liabilities would otherwise be difficult to recover.
Crest Nicholson v Ardmore highlights anticipatory orders and the relevance of adjudication awards. Mullalley & Co v STO shows that a non-UK parent may also be reached in an appropriate case.
For contractors and corporate groups in Essex, Kent and London, the practical lesson is to stop treating the subsidiary as a complete liability shield. Map the group, review guarantees and collateral warranties, and make sure your Construction Contractor Insurance or General Contractor Liability Insurance reflects every entity and activity that matters.
If you would like a confidential review of your construction insurance arrangements, contact Moyak Insurance Services on 01375 392 087 or email info@moyakinsurance.co.uk.
This article is for general information only and is not legal advice. Building Liability Orders and insurance responses depend on the facts, policy wording and applicable law. Speak to a solicitor and your insurance broker about your specific circumstances.
Frequently asked questions
What is a Building Liability Order?
A Building Liability Order is an order made by the High Court under section 130 of the Building Safety Act 2022. It can make a relevant liability of one company also the liability of associated companies where the court considers this just and equitable.
Can a BLO reach a parent company?
Yes. A BLO may reach a parent, subsidiary, sister company or other associated body corporate. Recent case law also indicates that an overseas parent may be reached where the statutory requirements are met.
Can an adjudication award support a BLO?
The decision in Crest Nicholson v Ardmore confirmed that an adjudicator’s decision can qualify as a relevant liability for BLO purposes, even though adjudication decisions are binding on a temporary basis unless finally determined elsewhere.
Does Construction Contractor Insurance automatically cover a BLO?
No. A BLO does not automatically create insurance cover. The policy wording, insured entities, type of liability, notification history, exclusions and applicable limits all need to be considered.
How far back can Defective Premises Act claims go?
For certain qualifying historic claims, the limitation period under the Defective Premises Act can extend to 30 years. The applicable period depends on the nature and timing of the work, so legal advice should be obtained on a particular project.