Specified perils in construction contracts
Construction works involve large amounts of money and are at high risk of damage. As a consequence construction contracts will generally include an obligation to insure:
- The works.
- On-site materials or goods.
- Off-site materials or goods.
- Existing structures and their contents.
This insurance may cover all risks, or may be restricted to certain ‘specified perils.’
Specified perils tend to be significant events that would cause very significant damage, such as fire, explosions, earthquakes, flooding and so on. All-risks insurance will tend to cover a broader range of risks, albeit it may not cover every possible risk.
Policies may be taken out by the contractor or by the client depending on the form of contract and the options selected, and may be for all risks, specified perils, or a combination for different parts of the cover. For example existing structures might be insured against specified perils whilst the construction works might be insured against all risks.
Insurance will generally be in the form of a ‘joint names policy’ in the names of the contractor and the client. This gives both parties their own rights to claim against the insurer. Other parties, such as funders may also be added as a joint name.
Joint-names insurance will generally prevent claims against the co-insured party for an insured loss. Whether or not claims can be made by one party against the other for uninsured losses where one of the parties is at fault will depend on whether the contract permits this or not.
NB See also relevant events.
[edit] Find out more
[edit] Related articles on Designing Buildings Wiki
- 3D animation for insurance risk analysis.
- Building Users' Insurance Against Latent Defects.
- Contract works insurance.
- Contractors' all-risk insurance.
- Design liability.
- Directors and officers insurance.
- Excepted risk.
- Flood insurance.
- Insurance.
- Joint names policy.
- Latent defects insurance.
- Legal indemnities.
- Off-site materials.
- Professional Indemnity Insurance.
- Residual value insurance.
Featured articles and news
Corruption in the construction industry.
What will it take to stop it ?
To celebrate world bee day 2022 !
Just one month until the changes to part L come into effect.
Not forgetting part F and the new part overheating part O.
Heat Pump demand rises by one quarter.
As energy prices jump up in cost.
With people in the UK from Ukraine.
Industry leader Steve Murray takes on role.
An abundant and versatile building material.
How overheating complicates ending gas in the UK.
600,000 heat pump installations targeted per year by 2028.
Cost planning, control and related articles on DB.
Helping prevent those unwanted outcomes.
ICE debate Public transport - post pandemic.
How has transport changed due to Covid-19 ?
Cross-ventilation in buildings. Do you have it ?
Will you need it ? after June 15 and the new Part O ?
Share your knowledge with the industry.
Create an account and write the first of many articles.
The green jobs delivery group.
CIAT commentary after the first meeting.
Liverpool's world heritage site status
Who is to blame?
Research recommends focussing on portfolio success rather than project success.
ICE and BSI launch revised PAS 128 standard.
The revised standard for mapping underground utilities.
Launching the UK net zero carbon buildings standard.
Cross-industry steering group seeks support in delivery.