During pre-delivery balancing and testing, a balance-weight retaining nut fell into the air gap, damaging both the rotor and stator of a hydro-electric generator. It was uncertain as to whether this had occurred whilst the generator was insured.

Mr Brear was instructed to determine the probability that the damage occurred during the period of insurance cover, and thus establish the insurer’s liability. This involved a review of witness statements, damage reports and electrical test results and construction of an event tree, with probabilities assigned to all branches.

It was demonstrated, without doubt, that the nut which caused the damage had not come loose, as suggested by the plant owner, but had been inadvertently left in the machine during balancing trials. On this basis the probability of damage occurring during the period of insurance cover was shown to be less than 2%.

As a result, the insurer’s liability was limited to no more than 2% of the total loss.