If you are undertaking a development or refurbishment of your home or other form of property and you have neighbours, the insurance that you or your Contractors have put in place to cover the Contract Works and attendant Liability exposures may lack one crucial element.
This is cover against your personal liability for damage to the property of your neighbours as a result of your or your contractors’ negligence.
So for example, if as a result of working on weight bearing walls or digging down to create a new living area, garage or swimming pool there is damage to the structure or foundations of a neighbouring property, you will potentially be personally liable for the cost of repairing that damage.
Under a standard Liability policy (Home or Contractors) you will not be able to claim for this type of cost without having purchased specific insurance cover.
There are specific sections of the Joint Contracts Tribunal (JCT) ’98 Standard Building Contract and the more recent 2005 JCT Standard Buildings Contract (also known as the JCT Minor Works Contract) which relate to this contingency. The relevant clauses are referred to respectively as JCT 21.2.1 and JCT 6.5.1.
If the Contractor is not deemed at fault for the damage caused to third party property then the Employer could face the costs on his or her own.
Insurance is available for this specific exposure. Normally it is issued in the joint names of the Contractor and the Employer and is arranged by the Contractor.
Please refer to the Policy section of our Buildings2Insure web site for details of this and other elements of the Contractors Specific Policy issued by RSA.