AN INSURANCE OFFICERS GUIDE TO CONSTRUCTION CONTRACTSGINNY HOPE

WHEN DO YOU KNOW ABOUT NEW BUILDINGS OR MAJOR REFURBISHMENTS?

At planning or design stage?

Prior to contract issue?

When works start?

When building finished?

The day it burns down?

TODAYS PROGRAMME DESIGN / PLANNING STAGE CONTRACT ISSUE INSURANCE PLACING

DESIGN/PLANNING - Get your insurers involved - Risk aggregation link bridges? - Compartmentation - Alarms - Sprinklers/gas extinguishment - Cladding materials combustible? - Bin storage

CONTRACT STAGEProfessional indemnity risksWho is insuring the works?How much liability cover?Who is insuring the existing building?What about adjacent property?Advance profits?

SOME CONTRACTSJCTGC WorksNECNB: DIFFERENT VERSIONS OF EACH. BEWARE!

SOME CONTRACTSJCT - AdvantagesWidely used & understoodContractors like itLots of case lawGood for minor works and refurbishments

WATCH OUT FOR

JCTINSURANCE OF EXISTING BUILDINGS

JCT

WATCH OUT FOR

JOINT NAMES PROVISIONS

ACTION ON EXISTING BUILDINGS

Delete the Joint names requirement ORAsk your insurers to include cover e.g. Zurich PART C Works in ProgressSection 2 Property InsuredWorks in ProgressExisting BUILDINGS and their CONTENTS insured under Part A but only during the period in which the BUILDINGS are undergoing alterations or additions including any agreed period for maintenance or making good defects.

JCT

WATCH OUT FOR

SUB-CONTRACTORS WORKS COVER DEFINED PERILS ONLY

FIRE/LIGHTNINGEXPLOSIONSTORMFLOODBURST PIPESEARTHQUAKEAIRCRAFTRIOTCIVIL COMMOTION

JCT

WATCH OUT FOR

ANY 21-2-1 REQUIREMENT

SOME CONTRACTSGC WORKS

Public sector contract; favours the EmployerContractors dislike itNeeds modifying to suit HE

GC WORKS

ALTERNATIVES B & C (AVOID JOINT NAMES PL)NO PROVISION FOR NON-NEGLIGENT COLLAPSE (21-2-1)

WATCH OUT FOR

SOME CONTRACTSNEC

Relatively new not widely knownPlain EnglishLittle case law yetNeeds adaptation for refurb works

NEC

80.1 Employer responsible for riot damage 84.2 Joint names EL/PLNo provision for non-negligent collapse

WATCH OUT FOR

INSURANCE PLACINGCONTRACT WORKS

Recommend some automatic provision for small contractsDont forget the terrorism coverSum insuredFree issue materialsAny special risks? E.g. water transitsCompletion date when?

CONTRACTORS PL & PI

What limit required?Novation issues (PI)Collateral warranties?

EXISTING BUILDING

JCT? Do you need joint names cover?Protecting contents during WorksSum insured after completion

21-2-1

Why needed?

21-2-1

Architect may specify requirementConsider ground conditions, nature of works, neighbouring property/facilitiesLimit?No standard wording for GC Works or NEC

CONCLUSION

Get involved earlyKeep checking developmentsDiary for completion