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
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