Why Do You Need JCT Clause Insurance?
The JCT issues various standard forms of contract and certain clauses will require different insurances to be put in place. Failure to take out the JCT Clause insurance could render you in breach of contract. If you are refurbishing or extending a building or building a new one, you’ll need to ensure that you, as the main contractor, have insurance for ‘Contractor All Risks’ (JCT 5.4A) and existing structures’ (JCT 5.4B), as well as Public Liability Insurance (JCT 5.3) and Professional Indemnity Insurance.
You may also need additional cover for JCT 21.2.1 of the JCT 1998 Standard Building Contract and JCT 6.5.1 of the JCT 2005 Standard Building Contract (sometimes referred to as the JCT minor works contract.) The insurance requirements under these 2 clauses are actually the same and deal with situations where negligence cannot be proven. These are not the same as public liability insurance and protect you against entirely separate risks.
Each time you do an extension, build a house or housing estate you are entering into a contract. You don’t go to a solicitor each time and ask them to draw up a contract. It is usual to use a standard form of contract, and joints contracts tribunal (JCT) are one of the most common providers of these contracts which determine from the outset, who is responsible for any eventuality so as to avoid disputes should they occur and also make sure that there is insurance in place.
Through consultation, experience, and development, they produce standard forms of contract for the construction industry. They are the most popular and most commonly used contracts in the UK construction industry. These contracts typically specify insurance requirements. You won’t be able to legally undertake the work without having the required insurance cover in place.
Who Does JCT Clause Insurance Protect?
It really depends which clause is applicable.
JCT 21.2.1 and JCT 6.5.1 insurance cover is designed to protect property owners, developers, project managers or building contractors from claims for damage to property due to collapse, subsidence, heave, vibrations, weakening or removal of support or lowering of groundwater attributable to the carrying out of the works but not due to any negligence of the contractor or design.
Public Liability Insurance Isn’t the Same Thing
Public Liability Insurance covers you against any claim of negligence. But where negligence can’t be proven, the insurers will not pay out against a public liability cover. Even if the costs are met by the owner’s building insurance policy, the insurer would look to make recovery against someone. Inevitably, this will be you and you’ll at least be facing large legal bills and at worst be facing their legal fees and repair costs.
At Bruce Burke & Co. we can offer you professional, impartial advice on exactly what cover you’ll need, so you’ll be protected come what may.