File Name: construction insurance and uk construction contracts .zip
There are a number of standard forms of construction contract and there are options which require a contractor to:.
- Sweden: Construction & Engineering Laws and Regulations 2020
- NBS National Construction Contracts and Law Survey 2012
- RIBA domestic building contract
Sweden: Construction & Engineering Laws and Regulations 2020
Also, the insuring clause in the relevant policy will typically include a large number of significant exclusions. Accordingly, the cover that is provided by CAR policies can vary considerably and the individual wording must be checked carefully to determine what is and is not covered by a particular policy.
CAR insurance is taken out either by the employer or the main contractor in a construction project—the construction contract will normally stipulate which party is to take it out. Under the JCT contracts, the insurance is to be taken out in the joint names of the contractor and the employer to cover 'all risks'. The insurance covers the works, the materials and the reasonable cost of removal and disposal of debris, and shoring and propping up the works.
The definition of 'all-risks' excludes loss or damage due to wear and tear, design defects and war, invasion, rebellion etc. The policy is defined so as to include subcontractors, either as joint insured or by virtue of a waiver of subrogation, but only for loss and damage caused by one of the 'specified perils'.
Specified perils are not as wide in scope as all risks. See Practice Note: Sub-contractors' insurance. The JCT contracts provide two options for new build which are set out in schedule 3 of the contract. Under option A the contractor takes out the joint names insurance for all risks. Under option B it is the employer who takes out the insurance. For refurbishment contracts or works carried out in existing buildings the insurance is to be taken out by the employer under option C.
The JCT editions of contracts also include an option for parties to agree an alternative tailored solution to insure existing buildings by way of a C.
This is particularly relevant where the employer is a tenant and existing building insurance is the landlord's responsibility. See Practice Note: Construction insurance—overlap between the works and existing buildings. In NEC3, the contractor bears the risk of damage to the works, however caused, unless they are amongst the employer risks listed in the contract. However, the contracts require the contractor to replace any damage which occurs to the works and this applies whether the damage has been caused by a contractor risk or an employer risk.
The core clauses of the NEC contracts only provide for the insurances to be taken out by the contractor. In NEC3, if the employer is to take out any insurance, it will only apply if this is listed as a specific requirement of the contract in the contract data: there is no provision in the contract terms stating that it will take out insurances.
The drafting of NEC4 is slightly different: it provides that the employer will take out the insurances that the Contract Data states that it will. The insurance to be taken out by the contractor CAR and public liability is to be in the joint names of the employer and the contractor. The contractor is required to take care of the works until take over.
A similar obligation to obtain all risks insurance is found in the editions. Where two parties have an equal interest in insured property, they will take out joint insurance. The features of a joint policy include that the interest of each of the insured parties is identical and that the insured parties are effectively treated as one for the purposes of compliance with the insurance policy conditions.
See Practice Note: Joint names insurance—construction contracts. In comparison, a composite insurance policy is a policy which covers more than one party in respect of the same subject matter. However, the interest of the parties in the property may well be different.
More significantly, each insured party is treated as a separate insured. The word terrorism has been defined in legislation on several occasions. Terrorism is treated slightly differently in all the various forms of construction contract.
At common law, in a situation where there is no written contract or the contract fails to allocate risk, the employer would bear the risk of terrorism. At common law, a contractor would only be liable for loss or damage caused by his own negligence, breach of contract or breach of statutory duty. Insurance cover for terrorism may be obtained via the Pool Re scheme or as an extension to the contractors all risk policy.
See Practice Note: Terrorism—risk and insurance for construction projects. However, a difficulty arises when damage is caused to a neighbouring property which cannot be traced to any negligence or breach of contract on the part of the contractor. As a result, an employer, on whose behalf the works have been carried out, is left with the risk of claims from third parties whose properties have been damaged, but where the contractor is not liable, because it has not been negligent.
Insurance is available to cover this type of risk. Where an employer believes that the risk is relevant, for example on tight city centre developments, it will instruct the contractor to take out the insurance in joint names. The insurance cover has many exclusions and, as such, the cover is quite narrow. See Practice Note: Non-negligent insurance.
The JCT Standard Building Contract is the only standard contract which makes provision for a non-negligent insurance policy. The description 'project policy' is generally given to a policy taken out by the employer to cover contractor's all risks and public liability on behalf of the employer, contractors, sub-contractors and suppliers.
Project policies are composite policies and are written to cover the particular project. As a result they can be written to cover very specific risks. See Practice Note: Project specific insurance policies. A sub-contractor will be liable for damage to his sub-contract works. This arises from his obligation to carry out and complete the sub-contract works.
A sub-contractor would also be liable if his negligence, breach of contract or breach of statutory duty causes damage to the remainder of the works. A sub-contractor's other potential liability is public liability for damage to property or injury or death to persons. Under the JCT contracts the CAR policy includes the sub-contractor either as a named insured or with a waiver of subrogation but only in respect of specified perils. As a result, a sub-contractor may face a subrogated claim from insurers where the damage was caused by its negligence.
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NBS National Construction Contracts and Law Survey 2012
Also, the insuring clause in the relevant policy will typically include a large number of significant exclusions. Accordingly, the cover that is provided by CAR policies can vary considerably and the individual wording must be checked carefully to determine what is and is not covered by a particular policy. CAR insurance is taken out either by the employer or the main contractor in a construction project—the construction contract will normally stipulate which party is to take it out. Under the JCT contracts, the insurance is to be taken out in the joint names of the contractor and the employer to cover 'all risks'. The insurance covers the works, the materials and the reasonable cost of removal and disposal of debris, and shoring and propping up the works. The definition of 'all-risks' excludes loss or damage due to wear and tear, design defects and war, invasion, rebellion etc. The policy is defined so as to include subcontractors, either as joint insured or by virtue of a waiver of subrogation, but only for loss and damage caused by one of the 'specified perils'.
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RIBA domestic building contract
Construction Insurance and UK Construction Contracts has long been the premier text for legal professionals looking for a combined analysis of construction contracts and their relation to insurance law. In a new and updated third edition, this book continues to provide in-depth commentary and pragmatic advice on all the most important regulations and policies surrounding contracts and insurance in the construction industry. Advanced Search. Book of the Month.
Endorsed and supported by the HomeOwners Alliance, the RIBA domestic building contract is an agreement between the client and the contractor. It can be used on all domestic projects on the client's home , including renovations extensions, maintenance and new buildings. You can print multiple times at no extra cost.
The construction industry has inherent risks and job sites are often bustling with activity. Workers, contractors, large machinery and more are needed to get the job done, which open up the possibilities of injuries, third-party damages and potential litigation. Advancing technology and machinery is alleviating some of the risks of doing business on the one hand, though can ultimately add more risks on the other. However, there are ways to mitigate risks by ensuring you have the right insurance coverage. Every business should invest in general liability insurance, especially those in the construction industry.
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