Last edited 19 Feb 2018

JCT Clause 6.5.1 Insurance

In the Joint Contracts Tribunal (JCT), Clause 6.5.1 places a requirement on the contractor to organise insurance both for themselves and the client. The clause appears in the JCT Standard Building Contract or JCT Minor Works Contract.

This insurance provides cover should damage be done to a neighbouring building due to works that are carried out, and the cause of which is not the result of negligence.

The case of ‘Gold v Fotheringham’ [1958] set the precedent that the employer of a contractor is responsible for any damage caused to third parties and liable to pay compensation.

A contractor will be required to hold public liability insurance, as will an architect and professional indemnity insurance, but these policies only indemnify them if the damage has arisen from their negligence. For example, a neighbouring building may start subsiding a few weeks after demolition works have taken place correctly and professionally. The owner of the damaged building will likely be insured under their buildings policy, but those insurers will be keen to make a recovery against another party, i.e. the employer of the contractor.

The insurance is generally obtained by the contractor on behalf of the employer, with both names on the policy. This should be made of a requirement of the project by the employer, and the contractor will include it within their quoted price to carry out the works as a whole. The employer will typically be responsible for both the premium and any excess payable in the event of a claim.

The risks that are covered are named within the JCT Contract as:

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