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Insurance & The JCT

Presented By

Jon Sharp, Consultant Solicitor

Insurance & The JCTPresented By:Jon Sharp, Consultant Solicitor

Jonathan has practiced in the City for close to 30 years and hasa wealth of experience in the insurance industry and has anumber of reported cases that demonstrate his abilities as aleader in the areas of dispute resolution, insurance, marine,aviation, general commercial matters and social media.Jonathan regularly presents seminars and lectures to thepublic insurers banks and other lawyers, on a range of topics,including social mediaHe has also conducted a number of Arbitrations, before boththe LMAA and ICC and dealt with boundary disputes, defendedplanning applications, and property transfers after matrimonialissues

Tel: 0207 167 6602Email: [email protected]

Insurance & The JCT

Agenda• Three Important Principles• Reform Of The Marine Insurance Act 1906• Third Parties (Rights Against Insurers Act) 2010• CIDRA• Insurance Act 2015• Warranties & Fraud• Case Studies• Construction Insurance• Top tips for getting your claim paid!

Insurance & The JCT

Three Important Principles

• Irrespective of the changes in the law, insurance is a policy ofindemnity, designed to put the Insured back into the positionthey were in before the insured event - not better, not worse

• Insurance is a contract between the Insured and the Insurer –therefore the insurance policy terms and conditions areimportant

• The Insured’s aim has to be to ensure it has full cover for anyeventuality - proper insurance cover can save businesses!

Insurance & The JCTReform Of The Marine Insurance Act 1906A little history• Served us well since 1906 but the Law Commission thought it archaic,unclear & unfair

• The London Insurance market has global influence , third largestmarket in the world

• Three new Acts introduced:• The Consumer Insurance (Disclosure & Regulations) Act 2012(CIDRA)

• The Third Parties (Rights Against Insurers) Act 2010 (enacted 2016!)• The Insurance Act 2015

• As an afterthought, the Enterprise Act!!

Insurance & The JCTCIDRA (Law From 2013)• Only applies to consumer insurance contracts• Bought by individuals wholly or mainly unrelated to trade, business orprofession – so motor, house contents, personal phone insurance etc.

Insurance Act 2015 (introduced 2016)• Applied to all commercial insurance policies commencing on or after 12thAugust 2016

• Introduces a new duty for all non-consumer Insureds to make a ‘fairpresentation of the risk’

• Reduces the Insurer’s remedies for breach of the duties of fairpresentation

Insurance & The JCTFair Presentation Of Risk

• It is your duty to provide all RELEVANT information• You must now involve all relevant Senior Management whencompiling information for insurers

• Also, state not only material circumstances that you know butought to have known, bearing in mind the nature of yourbusiness, after you have conducted a reasonable search

• You must provide that information to the Insurer in a reasonablyclear and accessible manner

Insurance & The JCTFair Presentation Of Risk – More Detail‘Senior Management’ – anyone who has a key role in makingdecisions on behalf of the company (this may not be a Boardmember, or indeed someone who has an official role) so SiteManagers, Operations Manager‘Material Circumstances’ – anything that would influence thejudgement of a prudent Insurer when decides whether to acceptthe risk and if so, on what terms‘Known Or Ought To Have Known’ – basically commonly availableinformation that affects your business e.g. New BuildingRegulations

Insurance & The JCTFair Presentation Of Risk – More Detail‘Reasonable Search’ – depends on the nature of your business, thetype of insurance you wish to buy and who is best placed toprovide that information‘Reasonably Clear And Accessible’ – not in a carrier bag! But alsodo not “hide” key facts amongst large amounts of wholly irrelevantmaterial

Insurance & The JCTInsurance Act 2015 (introduced 2016)If the Insured fails to give a fair presentation of the risk (and this isthe quid pro quo) the Insurer may avoid the policy as:

• Deliberate or reckless - avoid the policy and keep the premium• Not have written the risk - avoid the policy but return thepremium

• All other breaches – if the Insurer were to have imposedadditional terms they are imposed from inception or, if a higherpremium was to be charged, then the claim is reduced pro-rata

Insurance & The JCT

Insurance Act 2015 (introduced 2016)

The Act is a default scheme – if your Insurers wish to contract outthen you must (if a term is disadvantageous to an Insured):

• Take steps to bring it to the Insured’s attention• Ensure the term is clear and unambiguous

Probably not suitable for reinsurance contracts but rememberInsurer's CAN contract out

Insurance & The JCTAlso consider taking cover for:• Directors & Officers• Cyber Attack• Key Man• Pollution

• PLI – one event, sudden and accidental cover• CAR – some policies cover clean up costs to £1million• Site Specific Pollution – expensive

• Professional Indemnity• Duty of care to others• Avoids the issue of whose design error

Insurance & The JCTConclusion• Make sure you comply with your disclosure obligations – you cannotprovide your Insurer with enough information

• Mind your excesses – is the trade off for a lower premium worth it?• Read your policy wording• Notify Insurers of any changes to the risk in a policy year• Beware the Loss Adjustor• Remember – until the cover is confirmed you must act as a prudentuninsured

• CAVEAT – Effect of Enterprise Act – NO CASES

( £1,100 )

Specified Equipment (only insured at other locations if so indicated under Optional Covers above)

Own laptop computers, mobile phones, personal electronics, computer £1,265 games

Commercial Combined Agent / Booklet UK 81172 / CCC 0917 (9)

Policy number UK CCC 8991138

ZENITH MARQUE

Renewal Schedule

Section 1 Material Damage Included

Policy Index Linked Yes

Premises 1

Operative Covers la. Fire, lb. Explosion, lc. Lightning, ld. Aircraft, 2. Earthquake, 3. Riot, Malicious Persons, 5. Escape of Water, 6. Impact, 7. Sprinkler Leakage

Optional Covers 4. Storm or Flood - Included

8 . T h e f t - I n c l u d e d

9 . S u b s i d e n c e - I n c l u d e d

0 . A c c i d e n t a l D a m a g e - I n c l u d e d

1 . A cc i d en t a l B re a ka ge o f F ix e d G l a ss - N ot I nc lu ded

Terrorism - Not Included

Specified Equipment at Other Locations - Not Included

Sum Insured Declared Value

General Contents

Own Computer Equipment/Office Machines other than stock

Stock (Other Than Special Stock)

Excesses Amount

la. Fire, lb. Explosion, lc. Lightning, ld. Aircraft, 2. Earthquake, 3. Riot, Malicious Persons, 5. Escape of Water, 6. Impact, 7. Sprinkler Leakage, 4. Storm or Flood, 8. Theft, 10. Accidental Damage £250

9. Subsidence £1,000

Endorsements applicable - For text see attached Endorsements Schedule.

CO1 - Portable Heating Condition

C07 - Storage of Combustible Materials in the Open Condition

C09 - Fork Lift Truck Battery Charging Condition

C10 - Fuel Tanks in the Open Condition

C14 - Vehicles in the Open Condition

C99 - Interested Party Details

Section 2 Business Interruption Not Included

Section 3 Money Not Included

Section 4 Stock In Transit Not Included

Section 5 Deterioration of Stock Not Included

Section 6 Loss of Licence Not Included

Section 7 Employee Theft Not Included

Section 8 Contractors All Risks (C A R) Included

Annual Contract Value in total for all contracts £2,500,000

Maximum Contract Value any one contract £50,000

Contract Works sum insured £50,000

Zenith Marque Insurance Services Limited registered in England and Wales (No 2135730) with registered office at 45 Westerham Road, Bessels Green., Severeuds, Kent, 11913 2QB. Authorised and regulated by the Financial Conduct Authority (No 475572) and

appointed service provider to Zenith Insurance Plc, QIC (Europe) Limited and Chaucer Syndicates Ltd. Zenith Marque Insurance Services Ltd is part of the Markerstudy Group of Companies

Page 2 of 12

£11,500 £10,000 )

£16,022 £13,933 )

£25 ,000



ZENITH Renewal Schedule

MARQUE

Construction plant, tools and temporary buildings sum insured

Hired-In property sum insured

Employees personal tools and effects sum insured in total all employees

Employees personal tools and effects sum insured any one employee

Public Authorities extension sum insured

Terrorism Cover

Section 8 Excesses

Construction plant, tools, temporary buildings other than hired-in property

Contract Works

Endorsements applicable - For text see attached Endorsements Schedule.

C28 - Tools and Plant Security Condition

C36 - High Value Plant Excess

£ 2 , 5 0 0 N / A N / A N / A

f 1 0 , 0 0 0 N o

Amount

f100

£1,000

Section 9A Employers' Liability Limit of Liability

Employees Activities

Builders

Clerical admin & non-manual managerial

Clerical admin & non-manual managerial

Builders

Employment Status

Labour Only Sub Contractors

Limited Company - Directors

Employees

Employees

Included £10,000,000

Annual Wageroll

f650,000

£73,000

£250,000

£38,500 Section 9A Endorsements - For text see attached Endorsements Schedule.

G10 - Contractors Conditions

G56 - Survey and Risk Improvement Condition

G60 - Wood-Working Machinery Exception

Section 9B Public Liability Included Limit of Liability £5,000,000

Turnover Activities Type Turnover

Builders Turnover £2,465,000

Sub-Contractor Activities Type Payments

Builders Bona Fide Sub Contractor £35,000

Section 9B Excess Damage Only £500

Section 9B Endorsements - For text see attached Endorsements Schedule


G21 - Heat Work Away Exception

G43 - Fires Condition


Section 9C Products Liability Included Limit of Liability £5,000,000

Section 9C Excess Damage Only £500

Section 9C Endorsements - For text see attached Endorsements Schedule.


G21 - Heat Work Away Exception

G43 - Fires Condition


Zenith Marque Insurance Services Limited registered in England and Wiles 21357201with regained of lice et AS Westerham

Raid, genets Green, Sevencian, Kant 1N13 2t26. Aulhorited and regulated by the Financie I Conduct Authority (No 475572) and appointed service provider to Zenith Insurance Plc, QIC (Europe) Limited and Chaucer Syndicates Ltd

Zenith Marque Insurance Servion Ltd is part of the Mtarkerstudy Group at Companies

Page 3 of 12



ZENITH MARQUE

Renewal Schedule

Section 10 Legal Expenses Included Aggregate limit in the period of insurance £1,000,000

Limit any one claim £100,000

Zenith Marque Insurance Services Limited registered in England and Wales (No 2135730) with registered office at 45 Westerham Road, Bessels Green, Sevenoaks, Kent, TN13 2QB. Authorised and regulated by the Financial Conduct Authority (No 475572) and

appointed service provider to Zenith Insurance Plc, QIC (Europe) Limited and Chaucer Syndicates Ltd Zenith Marque Insurance Services Ltd is part of the Markerstudy Group of Companies

Page 4 of 12

Introduction to Your Policy Zenith Marque Insurance Services is pleased to welcome You as a customer. Zenith Marque Insurance Services administers Your policy on behalf of Zenith Insurance Plc (The Insurer).

This Policy Document is evidence of a legally binding contract of insurance between You (The Insured) and Zenith Insurance Plc (The Insurer).

In agreeing to Insure You and in calculating the premium We have charged and the terms to be applied, we have relied on:

You having taken all reasonable care to answer all questions asked honestly, accurately and to the best of Your knowledge; and

the completeness of any other information given either verbally or in writing by You or on Your behalf at the time You applied for insurance; and

the information supplied being given honestly and to the best of Your knowledge and belief.

The information that You have given to Us is shown on Your signed proposal form, or statement of fact or statement of insurance but will also include further information given either verbally or in writing by You or on Your behalf at the time You applied for insurance.

You must read this policy document and the Policy Schedule together. The Policy Schedule tells You which sections of the policy apply. Please check both documents carefully to make certain they give You the cover You want.

We have agreed to insure You against liability loss or damage that may occur within the geographical limits of the policy during any period of insurance for which You have paid, or agreed to pay the premium. The cover We provide is subject to the terms, conditions and exceptions contained in this policy document or in any endorsement applying to this policy document.

Nobody other than You (The Insured) and Us (Zenith Insurance Plc) has any rights that they can enforce under this contract.

Unless specifically agreed otherwise, this insurance shall be subject to English Law.

The terms and conditions of this policy and all other information concerning this insurance are communicated to You in the English language and We undertake to communicate in this language for the duration of the policy.

Gary Humphreys Underwriting Director Zenith Insurance Plc and/or its co-Insurer QIC Europe Limited.

Authorised Insurers, registered in Gibraltar No 84085. Registered Office: 846-848, Europort, Gibraltar.

Zenith Insurance Plc is regulated by the Gibraltar Financial Services Commission and subject to a limited regulation by the Financial Conduct Authority and the Prudential Regulation Authority in respect of underwriting business in the UK (No. 211787).

Zenith Insurance Plc is a member of the Association of British Insurers.

QIC Europe Limited, registered in Malta with registered address at No. 7, 4th Floor, Block C, Skyway Offices, 179 Marina Street, Pieta, PTA 9042, Malta.

QIC Europe Limited is authorised and regulated by the Malta Financial Services Authority (MFSA) to carry on general insurance business in terms of the Malta Insurance Business Act, 1998 and subject to limited regulation by the UK Financial Conduct Authority and the Prudential Regulation Authority in respect of underwriting business in the UK (No. 659521).

www.zenithmarque.com Commercial Combined 1

The information below relates to Section 10 of this policy document

This section of the Policy Document is evidence of a legally binding contract of insurance between You (The Insured) and Inter Partner Assistance SA (The Insurer).

Please check this section carefully to make certain it gives You the cover You want.

We have agreed to insure You against liability loss or damage that may occur within the geographical limits of the policy during any period of insurance for which You have paid, or agreed to pay the premium. The cover We provide is subject to the terms, conditions and exceptions contained in this section or in any endorsement applying to this section.

Nobody other than You (The Insured) and Us (Inter Partner Assistance SA) has any rights that they can enforce under this contract.

Unless specifically agreed otherwise, this insurance shall be subject to English Law.

The terms and conditions of this policy and all other information concerning this insurance are communicated to You in the English language and We undertake to communicate in this language for the duration of the policy.

Inter Partner Assistance in the UK is a branch of Inter Partner Assistance SA (`IPA'). IPA is authorised by the Belgian National Bank and subject to limited regulation by the Financial Conduct Authority in the UK. Details about the extent of IPA's regulation by the Financial Conduct Authority are available from IPA on request. IPA is listed on the Financial Services Register under number 202664. This can be checked by visiting the website www.fca.org.uk/register or by contacting the Financial Conduct Authority on 0800 111 6768.

Several Liabilities Notice The obligations of Zenith Insurance Plc and its co-Insurers under contracts of insurance to which they subscribe are several and not joint and are limited solely to the extent of each insurer's individual subscription. If one of the insurers does not for any reason satisfy all or part of its obligations the other insurers will not be responsible for the defaulting insurer's obligations.

2 Commercial Combined www.zenithmarque.com

Contents in page order

General Conditions ................................... ............. 4 General Definitions Applicable to all Lines of Cover ... ............. 6

Section 1 Property Damage ................. 8

Section 2 Business Interruption and Outstanding Debit Balances .................. .20 Section 3 Money ................................................. 26 Section 4 Stock in Transit ................................................................................................................... .30 Section 5 Deterioration of Stock ..................................................................................................................... 31 Section 6 Loss of Licence .............................................................................................................................. 32 Section 7 Employee Theft ........ ,33

Section 8 Contractors' All Risks .............................................. 34 Section 9 Liability Insurance 39 Subsection 9A Employers Liability .................................................. 40 Subsection 9B Public Liability ... 41 Subsection 9C Products Liability 43 Section 10 Legal Expenses .............................................................................................................................. 45

General Exceptions ........................................................................................................................................................... 57 Terrorism Extension Terrorism ......................................................................................................................................... 59 Claims Conditions ............................................................................................................................................................. 61 Customer Care Service and Complaints Procedure .......................................................................................................... 64


General Conditions applying to all sections of the insurance

Where any term of this insurance said (in the term itself or by any heading) to be a condition, requires You to do or comply with anything and You have failed to do or comply with that thing in circumstances where compliance with the term (other than one defining the risk as a whole) would tend to reduce risk of Liability, Loss, Injury or Damage of a particular kind, or at a particular location, or at a particular time, we shall not cover any claim under this insurance for such of Liability, Loss, Injury or Damage unless you establish that the non-compliance could not have Increased the risk of the Liability, Loss, Injury or Damage which actually occurred in the circumstances in which it occurred. You and anyone claiming cover must keep to all the conditions in this document and any applicable Endorsements throughout the Period of Insurance and We will only provide the cover described in this insurance if You have kept to the following conditions:

1 You must provide to us a fair presentation of the risk in the Proposal or Statement of Fact or in any other information given at inception, renewal and variation of this Policy. This means You must disclose to Us

a) every material circumstance which You know or ought to know (including matters known to those responsible for Your insurance, and, if You are not an individual, matters known to Your senior management) or

b) sufficient information to put Us on notice that We need to make further enquiries to find out about those material circumstances and

c) such disclosure is in a manner which would be reasonably clear and accessible to Us and

d) in which every material representation as to a matter of fact is substantially correct and every material representation as to a matter of expectation or belief is made in good faith.

2 In the event that You or anyone acting on your behalf fails to provide a fair presentation of risk:

a) We may treat this Policy as void and refuse all claims and recover from You any sums already paid by Us to You in respect of claims if:

I) such failure was deliberate or reckless and/or

ii) We would not have entered Into this Policy on any terms If You had made a fair presentation of the risk.

If We treat the policy as void, We will return the premium paid unless such failure was deliberate or reckless.

b) if We would have entered into the Policy but on different terms had You made a fair presentation of the risk We may:

i) reduce proportionately the amount to be paid on any claim if We would have charged a higher premium calculated by applying the percentage that the actual premium charged bears to the higher premium

ii) treat the Policy as entered into on any such different terms (other than relating to the premium) that We would have entered into had You made a fair presentation of risk.

3 If You make a fraudulent claim, We will not pay the claim, We may give you notice that We treat the Policy as having been terminated so that cover will end and You will lose any premium You have paid and We will recover from You any sums that We have paid in respect of the claim. We may also contact the Police and/or relevant authority(s) in relation to possible criminal proceedings.

4 If, under the law of any country which this insurance covers You in, We have to settle a claim which We would not otherwise have paid, You, or the person who made the claim, must pay this amount back to Us.

5 If there Is other insurance in force (or which would be in force If Our insurance did not exist and You had complied with all the terms of the other insurance) which covers the same loss, Damage or liability as Our insurance, We will only pay any amount over that provided by the other insurance. This condition does not make Us responsible for any amount We would not otherwise have paid under this insurance.

6 You cannot transfer this insurance to anyone else.

7 Changes in Your circumstances

You must tell Us as soon as possible about any changes which could affect Your insurance and which have happened since the cover first started or since You last renewed it. If You do not tell Us about these changes, Your insurance may not cover You fully or at all. If You are not sure whether any facts are important, please ask Your insurance adviser. Here are some examples of changes You should tell Us about:

An increase in the estimated wages, salaries, Turnover, payments to sub-contractors who are not employees, maximum number of employees or maximum number of sub-contractors who are not employees, but only if any increase is more than 50% of Your previously advised estimate for the Period of Insurance. Any increase of less than 50% may be declared at the end of the Period of Insurance in accordance with the General Condition 'How your premium works' below,

A change in the activities of the Business, including any part-time work,

Convictions and prosecutions, other than those for motoring offences.

We shall be entitled to increase or reduce the premium and/or vary the terms, conditions and exceptions of this Insurance in respect of the unexpired term of this insurance to adequately reflect any alteration in the risk. In some circumstances We may cancel the insurance in accordance with the cancellation condition below.

How Your premium works

Your premium is the minimum and deposit premium based on the estimates You have provided. You must keep an accurate record of the actual figures. Within one month of the expiry of each Period of Insurance You must provide us with the actual figures, so that the premium can be recalculated. If the recalculated premium exceeds the minimum and deposit premium You have paid, we can charge an additional premium which You must pay.

Cancellation

This is how Your insurance can be cancelled:

We or Your insurance adviser can send You seven days' notice to Your last known address. We will refund the proportion of Your premium equivalent to the period of the insurance You have left. We will not give a refund if there has been a claim or an Occurrence which could lead to a claim in the current Period of Insurance.

4 Commercial Combined www.zenithmarque.com

General Conditions applying to all sections of the insurance (continued)

If We or Your insurance adviser cancel this insurance because You have not paid the full premium, We will work out the proportion you owe using Our short period rates shown below.

You can cancel this insurance by making a request to Us or Your insurance adviser. If there have been no claims in the current Period of Insurance and You can confirm that You are unaware of any claim or Occurrence which could lead to a claim, We will work out a charge for the time You have been covered using Our short-period rates shown below. We will refund any amount We owe You.

Period of time You have Refund of had the cover, up to: premium

One month 70%

Two months 60%

Three months 50%

Four months 40%

Five months 30%

Six months 20%

Seven months 10%

More than seven months Nil

8 This insurance does not give rights to any person other than You (the insured person) unless We say differently elsewhere in this document.

No rights to enforce any term of this insurance under the Contracts (Rights of Third Parties) Act 1999 are given to any person who Is not a party to this Insurance but this does not affect any right or remedy of any such person that arises apart from that Act.

9 We may at any time pay the Limit of Liability (after the deduction of any sum already paid) or any lesser amount for which a claim can be settled and shall be under no further liability except for the payment of costs and expenses Incurred prior to the date of payment (provided that the Limit of Liability stated in the Schedule is sufficient to allow it).

10 You must:

a) maintain all buildings, furnishings, ways, works, machinery, plant, caravans and vehicles in sound condition,

b) take all reasonable precautions to prevent Injury or Damage which may give rise to a claim under this insurance,

c) exercise care in the selection and supervision of Employees,

d) as soon as possible after discovery ensure any defect or danger is made good or remedied and in the meantime ensure additional precautions are taken as the circumstances require,

e) comply with all statutory requirements and other safety regulations imposed by any authority.

11 We shall not be liable for the amount of the Excess stated in the Schedule.

12 Interpretation

a) This insurance, the Schedule, Statement of Fact and any Endorsements shall be read together as one contract.

b) Any word or expression to which a specific meaning has been attached in this insurance shall bear the same meaning wherever it may appear.

c) Any reference to the singular shall include the plural and vice versa.

d) The masculine shall include the feminine and vice versa.

e) A statute statutory instrument regulation or order shall include any amendment and/or re-enactment thereof.

f) All terms shall be interpreted in a way that Is consistent with the Insurance Act 2015.

13 This insurance shall be governed in all respects by the law applying in the particular country in the UK in which You live. If there is any dispute over which law is to apply to this insurance it will be English law.

14 Where there is more than one of You this insurance will apply separately to each of You in the same manner and to the same extent as if a separate Insurance had been issued to each of You and We agree to waive all rights of subrogation against any of You.

All the Sums Insured, Limits of Indemnity, Limits of Liability and any other restrictions on the amount of Our liability stated in this Policy will apply as maximum limits to Our liability irrespective of the number of persons entitled to indemnity under this Policy.

For the purposes of the Sums Insured, Limits of Indemnity, Limits of Liability and any other restrictions on the amount of Our liability You and all other persons entitled to indemnity under this Policy shall be treated as one party or legal entity so that there will be only a single contract of Insurance between Us as one party and You and all other persons entitled to indemnity as the other party.

15 If the premium has been calculated on estimates given by You, You must keep an accurate record of the relevant figures which We can inspect.

Within one month of the expiry of each Period of Insurance You shall supply Us with a statement (in the form We require) so that the premium for that period can be calculated.

If applicable You must pay Us the difference. If You do not supply a statement within one month of the expiry of the Period of Insurance We may calculate and charge an additional premium which You must pay.

16 This Policy shall be avoided should:

a) the Business be wound up or carried on by a liquidator or receiver or permanently discontinued or

b) Your interest cease otherwise than by death.

17 Our liability in any one Period of Insurance (unless stated to the contrary) shall not exceed the total sum Insured or in respect of any one Individual item, Its sum insured in the Schedule or any other stated liability.

18 Breaches of warranties

We will have no liability to pay any claim arising or attributable to something happening after any breach of warranty but before such breach has been remedied.


Insurance & The JCT ContractPresented By: Phillip J Lamb, Associate DirectorPhillip is an Associate Director of MPW with many years experience in the insurance industry and brokingsector with a long standing specialism in Construction Industry insurances. Phillip began his career withInsurers Guardian Royal Exchange (now part of AXA Group) in Maidstone before moving to the specialistConstruction broker Stewart Wrightson (Willis Group) in 1985

He moved to the Construction and Engineering Division of HSBC Insurance Brokers in 1997 and wasinvolved in both annual and project specific insurance placements both in the UK and overseas

Phillip left to set up a specialist Construction Division at Ward Evans (Giles Insurance Brokers ) in 2001before linking up again with many of his former colleagues at MPW Ltd in October 2005

Phillip is Account Director on a number of major Construction industry accounts and also has relationshipmanagement responsibilities with partner Insurers

A father of two daughters, In his own time Phillip is a keen follower of sport and plays golf whenevertime and the weather permits

Tel: 01622 656 138 Mob: 07795 102 450 Email: [email protected]

J C T Building Contracts

INTRODUCTION JCT CONTRACT SUITE DESIGN & BUILD CONTRACT 2016 INDEMNITY AND INSURANCE PROVISIONS POTENTIAL CONCERNS CONTACTS QUESTIONS

CONTENT

* MAIN FORM(S) OF CONTRACT FOR GENERAL CONSTRUCTION FOR MANY YEARS (50 +)

• RECOGNISED AS THE “STANDARD CONTRACT”• NEC (4) CONTRACT A RECENT ALTERNATIVE • OTHER CONTRACT FORMS FOR SPECIFIC AREAS OF

CONSTRUCTION: • Such as• Civil Engineering• Mechanical Engineering

JCT CONTRACT SUITE

VAST ARRAY OF CONTRACT FORMS / SUB CONTRACT FORMS AND WARRANTIES

WE WILL FOCUS ON THE MAIN FORM WE ENCOUNTER MOST JCT DESIGN & BUILD FORM 2016

CONTRACT FORMS ARE VERY OFTEN AMENDED WILL WORK ON THE BASIS OF THE STANDARD PROVISIONS

JCT CONTRACT SUITE

BASED UPON EMPLOYERS REQUIREMENTS AND CONTRACTORS PROPOSALS FIXED POINT OF RESPONSIBILITY FOR CONSTRUCTION & DESIGN ISSUES NEITHER CONTRACT SUM OR PERIOD CAN BE VARIED UNLESS EMPLOYERS

REQUIREMENTS ARE AMENDED POPULAR PROCUREMENT METHOD FOR THESE REASONS

DESIGN & BUILD CONTRACT 2016

CONTRACTORS DESIGN INDEMNITY SET OUT IN CLAUSE 2.17 WHERE THE DESIGN IS COMPRISED IN THE EMPLOYERS REQUIREMENTS AND

CONTRACTORS PROPOSALS THE CONTRACTOR IS RESPONSIBLE FOR ANY INADEQUACY IN THE DESIGN

THEY HAVE THE SAME DUTY OF CARE AS AN ARCHITECT OR OTHER PROFESSIONAL

INDEMNITY AND INSURANCE PROVISIONS

UNDER CLAUSE 2.17 CONTRACTOR MUST SUPPLY ALL RELEVANT DESIGN DOCUMENTS FOR RETENTION AND USE BY EMPLOYER

CONTRACTOR RESPONSIBLE FOR ANY INADEQUACY IN THE DESIGN – IT’S NOT RIGHT!

THIS WILL INCLUDE DESIGNS CARRIED OUT ON BEHALF OF THE CONTRACTOR THAT FORM PART OF THE CONTRACTOR’S PROPOSALS


THIS CAN INCLUDE ANY DESIGN WORKS CARRIED OUT BY CONSULTANTS ON BEHALF OF THE EMPLOYER THAT ARE THEN NOVATED TO THE CONTRACTOR

ANY CLAIM FOR A POSSIBLE DESIGN DEFECT WILL LAND AT THE CONTRACTOR’S DOOR

HE / HIS INSURERS WILL HAVE TO DEFEND ANY CLAIM WITH ATTENDANT COSTS

THERE MIGHT BE A ROUTE OF RECOVERY IF NEGLIGENCE CAN BE PROVEN ON THE PART OF ANY CONSULTANT PROVIDING A DESIGN FUNCTION


CONTRACTORS OBLIGATION TO INSURE PROFESSIONAL INDEMNITY INSURANCE SET OUT IN CLAUSE 6.15

THEY MUST EFFECT COVER FOR THE SUM /LIMIT STATED IN THE CONTRACT PARTICULARS

HE MUST MAINTAIN THE POLICY FOR THE PERIOD STIPLUATED IN THE CONTRACT PARTICULARS

HE MUST PROVIDE EVIDENCE THAT HE HAS SUCH INSURANCE IN PLACE


CONTRACTOR IS REQUIRED TO EFFECT COVER PROVIDED IT IS AVAILABLE AT COMMERCIALLY REASONABLE RATES

IF THIS IS NOT THE CASE THEN THE CONTRACTOR MUST NOTIFY THE EMPLOYER AND IF POSSIBLE A RESOLUTION SOUGHT

WE WILL HIGHLIGHT SOME OF THE DIFFICULTIES IN THE PROFESSIONAL INDEMNITY MARKET LATER


OTHERWISE PROVISIONS SET OUT IN SECTION 6 “INJURY DAMAGE AND INSURANCE”

CLAUSE 6.1 CONTRACTOR’S LIABILITY – PERSONAL INJURY OR DEATH (EMPLOYERS AND PUBLIC LIABILITY) ARISING OUT OF THE WORKS

CLAUSE 6.2 CONTRACTORS LIABILITY – LOSS , INJURY OR DAMAGE TO PROPERTY – EXCLUDES “THE WORKS AND EXISITING STRUCTURES” PUBLIC LIABILITY)


CLAUSE 6.3 LOSS OR DAMAGE TO EXISITING STRUCTURES – EXISTING STRUCTURES AND THEIR CONTENTS DO NOT COUNT AS PROPERTY PURSUANT TO CLAUSE 6.2

SIMILARLY THE WORKS DO NOT COUNT AS PROPERTY PURSUANT TO CLAUSE 6.2

THIS PROPERTY IS AT THE RISK OF THE EMPLOYER


INSURANCE AGAINST PERSONAL INJURY AND PROPERTY DAMAGE –CONTRACTORS INSURANCE

CLAUSE 6.4 CONTRACTOR MUST INSURE FOR THE STAUTORY REQUIRED LIMIT FOR EMPLOYERS LIABILITY

FOR ANY OTHER CLAIMS FOR THIRD PARTY INJURY OR PROPERTY DAMAGE THE MINIMUM INDEMNITY LIMIT REQUIRED WILL BE SET OUT IN THE CONTRACT PARTICULARS


CLAUSE 6.5.1 CONTRACTOR’S INSURANCE OF THE LIABILITY OF THE EMPLOYER CONTRACT PARTICULARS WILL SET OUT IF THIS COVER IS REQUIRED WHERE THE WORKS ARE CLOSE TO OR ON A SHARED WALL WITH A

NEIGHBOURING PROPERTY IT IS VERY LIKELY TO BE RECOMMENDED COVERS THE EMPLOYERS LEGAL LIABILITY NOT THE CONTRACTOR’S


COVERS “ANY EXPENSE, LIABILITY, LOSS CLAIM, OR PROCEEDINGS FOR WHICH THE EMPLOYER MAY INCUR OR SUSTAIN BY REASON OF INJURY OR DAMAGE TO ANY PROPERTY CAUSED BY COLLAPSE, SUBSIDENCE, HEAVE, VIBRATION WEAKENING OR REMOVAL OF SUPPORT OR LOWERING OF GROUND WATER

ARISING OUT OF THE CARRYING OUT OF THE WORKS


COVER SPECIFICALLY EXCLUDES: Any negligent act of the Contractor (potentially covered under their Public

Liability) Errors or omissions in design Inevitable damage That which Employer must insure under Clause 6.7.C Works or Site Materials War etc…


Pollution or contamination Damages in respect of breach of Contract

QUOTATIONS OBTAINED ON A “PROJECT SPECIFIC BASIS” IDEALLY SHOULD BE PLACED WITH THE CONTRACTOR’S PUBLIC LIABILITY

INSURER AVOIDING DISPUTES OVER NEGLIGENCE


CLAUSE 6.7 INSURANCE OF THE WORKS AND EXISTING STRUCTURES INSURANCE OPTIONS A, B, & C SET OUT IN SCHEDULE 3 TO THE CONTRACT IN EACH CASE THE POLICY MUST BE IN JOINT NAMES OF THE EMPLOYER AND

CONTRACTOR IN EACH CASE THE POLICY MUST MAINTAIN UNTIL “PRACTICAL COMPLETION”

EVIDENCED BY THE APPROPRIATE CERTIFICATE


CLAUSE 6.7 A – “NEW BUILD” WITH CONTRACTOR TO INSURE WORKS FOR “ALL RISKS”

CLAUSE 6.7 B – “NEW BUILD” WITH EMPLOYER TO INSURE WORKS FOR “ALL RISKS”

CLAUSE 6.7.C – WORKS INVOLVING ALTERATION, REPAIR, EXTENSION, RENNOVATION, ALTERATION, MAINTENANCE OR REPAIR OF AN EXISTING PROPERTY BEING WORKED UPON


CLAUSE 6.7 C 1 – EMPLOYER TO INSURE EXISTING BUILDING AND CONTENTS FOR LOSS OR DAMAGE ARISING FROM ONE OF THE “SPECIFIED PERILS” RISKS.

CLAUSE 6.7 C2 – EMPLOYER TO INSURE WORKS FOR “ALL RISKS” TERRORISM SHOULD BE INCLUDED - CLAUSE 6.10 WATCH OUT WHERE THE EMPLOYER UNDER CONTRACT DOES NOT ACTUALLY

OWN THE BUILDING BEING WORKED UPON – THEY ARE A TENANT FOR EXAMPLE


WHICHEVER CLAUSE APPLIES SUB CONTRACTORS ON SITE HAVE AUTOMATIC BENEFIT TO CERTAIN COVER/ PROTECTION UNDER THE JOINT NAMES POLICY

A WAIVER OF SUBROGATION RIGHTS OR RECOGNITION AS INSURED FOR DAMAGE ARISING OUT OF “SPECIFIED PERILS” – UNTIL THE SUB CONTRACT WORKS ARE PRACTICALLY COMPLETE


EMPLOYERS AND PUBLIC LIABILITY INSURANCE

JOINT NAMES INSURANCE (CLAUSE 6.7C)

PROFESSIONAL INDEMNITY INSURANCE

POTENTIAL CONCERNS

EMPLOYERS AND PUBLIC LIABILITY INSURANCE JCT CONTRACT NOT PARTICULARLY PRESCRIPTIVE POLICY WORDINGS ARE MANY AND VARIED COVER MUST REAMIN IN FORCE DURING THE OBLIGATION PERIOD UNDER

CONTRACT COVER MUST FULLY REFLECT THE NATURE OF THE WORK TO BE UNDERTAKEN THERE MUST BE NO “TYPE OF WORK” EXCLUSION OR LIMITATION

APPLICABLE

POTENTIAL CONCERNS

EMPLOYERS AND PUBLIC LIABILITY INSURANCE NATURE STATUS AND SECURITY RATING OF INSURERS

VARY MANY “OFFSHORE” UNRATED INSURERS OPERATE IN

THE UK MARKET WHO IS RESPONSIBLE FOR CHECKING THE ONGOING

ADEQUACY OF INSURANCE ?

POTENTIAL CONCERNS

JOINT NAMES INSURANCE (CLAUSE 6.7C) THE OBLIGATIONS UNDER CLAUSE 6.7.CI OFTEN CAUSE

PROBLEMS THE EMPLOYER UNDER CONTRACT MIGHT NOT BE ABLE

TO COMPLY WITH THE SPECIFIC INSURANCE OBLIGATIONS

HE MIGHT NOT OWN OR INSURE THE BUILDING (HE IS A TENANT OR LEASEHOLDER) IS THE MOST COMMPON REASON FOR SUCH PROBLEMS

POTENTIAL CONCERNS

JOINT NAMES INSURANCE (CLAUSE 6.7C) THE BUILDING MIGHT NOT BE INSURED BUT PROTECTED

UNDER A “RISK PROTECTION AGREEMENT “ OR CAPTIVE INSURANCE PROGRAMME

THE EXISTING BUILDINGS OWNER (THE LANDLORD) OR THEIR INSURERS MIGHT SIMPLY REFUSE TO GRANT THE NECESSARY JOINT NAMES INSURANCE PROVISIONS

THERE MIGHT BE OTHER OCCUPANTS OF THE BUILDINGS WHO HAVE NO INTEREST IN THE CONTRACT

POTENTIAL CONCERNS

JOINT NAMES INSURANCE (CLAUSE 6.7C) FOOTNOTE WITHIN JCT CONTRACT RECOMMENDS THAT

AN ALTERNATIVE INSURANCE SCHEDULE CI IS DRAWN UP BY AN INSURANCE PROFESSIONAL

OBVIOUSLY WE WOULD AGREE WITH THAT !!!!!!!!

POTENTIAL CONCERNS

PROFESSIONAL INDEMNITY INSURANCE THE MARKET FOR DESIGN AND BUILD PROFESSIONAL

INDEMNITY INSURANCE IS VERY DIFFICULT THE IMPLICATIONS OF THE FIRE AT “GRENFELL” HAVE

BEEN WIDESPREAD AND SIGNIFICANT MARKET CAPACITY HAS REDUCED – COST HAS SOARED AGGREGATE LIMITS ARE BEING IMPOSED A VARIETY OF “COMBUSTIBILITY” EXCLUSIONS FOR

CLADDING ARN BEING IMPOSED

POTENTIAL CONCERNS

PROFESSIONAL INDEMNITY INSURANCE IN EXTREME CASES A TOTAL EXCLUSION RELATING TO

“COMBUSTIBILITY” OF THE ENTIRE ENVELOPE IS BEING APPLIED

CLAIMS ARE GENERALLY BEING VERY STRENUOUSLY REFUTED AND INSURERS ARE RELUCTANT TO GRANT INDEMNITY

THE DEFAULT POSITION IS “YOU ARE NOT COVERED”

POTENTIAL CONCERNS

PROFESSIONAL INDEMNITY INSURANCE THE CONTRACTOR IS PLACED IN AN EXTREMELY

DIFFICULT POSITION HE MIGHT BE IN BREACH OF CONTRACT ANY WARRANTY GRANTED MIGHT BE AFFECTED SUCH DOCUMENTS WILL OFTEN HAVE A LONG TAIL

LIABILITY OF 12 YEARS HE MUST ADVISE THE PARTY TO THAT CONTRACT OR

WARRANTY

POTENTIAL CONCERNS

• PHILLIP J LAMB ( ASSOCIATE DIRECTOR)• TELEPHONE 01622 656138• MOBILE 07795102450• E-MAIL [email protected]

CONTACTS

[email protected]

Looking For More Information?

COVD19 Vs AdjudicationThursday 18th June, 5pm

EOT & Proving DelayWednesday 24th June, 9am

Renewables Part 2Wednesday 24th June, 5pm

QS Series: AdjudicationThursday 25th June 6.15pm

To book a place / places please email Julie at [email protected]

What The Property Team Does & What We Can Do To Help You!

• Development agreements – conditional contracts and pre-let agreements • Financing for the purchase and building works and the re-financing including

short term bridging finance • Site acquisition and sale (from plan or as-built)• Review of Section 106 Agreements and other planning documents • Option agreements • Joint ventures for finance and development• Land promotion and other acquisition schemes• Residential and mixed use development and plot sales/off plan purchases

for high net worth clients • Leases and the management work of commercial and residential portfolios• Servicing the needs of commercial occupiers of offices, showrooms,

warehouses and ‘sheds’Contact: Michael Shapiro on [email protected]

Tel: 0207 167 6602

HELPLINECALL US ON

0207 167 6602

Insurance & The JCT OSem JUN 20 JSH PVer...6SHFLILHG (TXLSPHQW RQO\ LQVXUHG DW RWKHU ORFDWLRQV LI VR...

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