AN INSURANCE OFFICERS GUIDE TO CONSTRUCTION CONTRACTS GINNY 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 1. DESIGN / PLANNING STAGE 2. CONTRACT ISSUE 3. INSURANCE PLACING

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

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

SOME CONTRACTS JCT GC Works NEC NB: DIFFERENT VERSIONS OF EACH. BEWARE!

SOME CONTRACTS JCT - Advantages Widely used & understood Contractors like it Lots of case law Good for minor works and refurbishments

WATCH OUT FOR JCT INSURANCE OF EXISTING BUILDINGS

JCT WATCH OUT FOR JOINT NAMES PROVISIONS

ACTION ON EXISTING BUILDINGS Delete the Joint names requirement OR Ask your insurers to include cover e.g. Zurich PART C Works in Progress Section 2 – Property Insured a)Works in Progress b)Existing 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/LIGHTNING EXPLOSION STORM FLOOD BURST PIPES EARTHQUAKE AIRCRAFT RIOT CIVIL COMMOTION

JCT WATCH OUT FOR ANY REQUIREMENT

SOME CONTRACTS GC WORKS Public sector contract; favours the Employer Contractors dislike it Needs 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 CONTRACTS NEC Relatively new – not widely known Plain English Little case law yet Needs adaptation for refurb works

NEC 80.1 Employer responsible for riot damage 84.2 Joint names EL/PL No provision for non-negligent collapse WATCH OUT FOR

INSURANCE PLACING CONTRACT WORKS Recommend some automatic provision for small contracts Dont forget the terrorism cover Sum insured Free issue materials Any special risks? E.g. water transits Completion 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 Works Sum insured after completion

Why needed?

Architect may specify requirement Consider ground conditions, nature of works, neighbouring property/facilities Limit? No standard wording for GC Works or NEC

CONCLUSION Get involved early Keep checking developments Diary for completion