Non-negligent liability insurance
Construction is an inherently dangerous process with many hazards, in particular when working close to existing buildings or other structures. In such situations, there is the potential for that property to suffer damage, even if care is exercised.
As a result of the potential for these sorts of losses to occur on construction projects, Joint Contracts Tribunal (JCT) contract forms provide for non-negligent liability insurance to be taken out, and other forms of contract may have similar provisions, either as part of the standard form or as an amendment.
Such provisions require that the contractor takes out a policy that protects the developer in respect of any expense, liability, loss, claim or proceedings incurred as a result of damage to property from the works being undertaken due to; collapse, subsidence, heave, vibration, weakening or removal of support and lowering of ground water. It is also possible to include cover from the hazards of flood, explosion, backing up of drains and bodily injury to third parties caused by an insured peril.
The cover may be in respect of existing buildings being worked upon and/or property on adjoining land. The policy is issued in the joint names of the employer and contractor.
This sort of cover is not always be required as the kind of activities which give rise to such losses may not be present on all projects. Consultants will usually be able to recommend whether or not the cover is required.
There are a variety of activities that could give rise to the potential hazards covered by the insurance, including:
- Piling and foundation excavations
- Underpining.
- De-watering of the ground
- Demolition close to an existing property.
- Shoring of walls
- Works that may affect the load-bearing capacity of a structure.
- Works on listed buildings or buildings in a poor condition.
Typical exclusions from non-negligent cover might include:
- Damage caused by negligence, omission or by default of the contractor or subcontractor.
- Damage which is due to error or omissions during the design process.
- Damage which could reasonably have been foreseen as inevitable.
- Penalties incurred under contract and damages for breach of contract.
The Royal Institute for Chartered Surveyors (RICS) have produced a guidance note which provides further information on non-negligent liability insurance, including details of Gold v Patman & Fotheringham (1958), the landmark case in this situation.
[edit] Related articles on Designing Buildings Wiki.
- 3D animation for insurance risk analysis.
- Building Users' Insurance Against Latent Defects.
- Contractors' all-risk insurance.
- Contract works insurance.
- Directors and officers insurance.
- Employer's liability insurance.
- Flood insurance.
- Insurance.
- Insurance terminology.
- Integrated project insurance.
- Latent defects insurance.
- Legal indemnity insurance.
- Professional Indemnity Insurance.
- Public liability insurance.
- Residual value insurance.
[edit] External references
Featured articles and news
From Chaucer to Fawlty Towers.
Electrotechnical excellence, now open for entries.
Net zero electricity grids BSRIA guide NZG 5/2024
Outlining the changes needed to transition to net zero.
CIOB Global Student Challenge 2024
Universitas Indonesia wins for second year running.
New project and cultural district described in detail.
The nature of EPCs, crticism and inaccuracies.
History, issues and redesign.
From waste recycling to energy performance the hierchy.
An introduction to WERCS and WEEE responsibilities
Dealing with 2 million tonnes of waste equipment a year.
Global BACS Market: analytics and optimisation
A BSRIA glance at building automation and control systems.
What it is and how to use it.
Types of insulating plaster by binder and insulant.
Investors in People: CIOB achieves gold
Reflecting a commitment to employees and members.
Scratching beneath the surface; a guide to selection.
ECA 2024 Apprentice of the Year Award
Entries open for submission until May 31.
UK gov apprenticeship funding from April 2024
Brief summary the policy paper updated in March.