What is clause 21.2.1/6.5.1 in a JCT contract?
21.2.1/6.5.1 clauses are contained in the Joint Contracts Tribunal (JCT) Standard Form of Building Contract. It requires insurance to be arranged in the joint names of the employer and the contractor.
What is non-negligence insurance?
JCT non-negligence insurance is designed to cover an employer or property owner from the cost of damage to a neighbouring property which is not as a result of negligence (which is covered under a public liability policy) but as a result of the work that you are carrying out.
What could happen?
A contractor could be undertaking piling and underpinning work at a property. There could be another property a couple of metres away. Cracks could begin to appear on the neighbouring property which a surveyor deems to have happened due to vibrations from the piling work on the property being underpinned. Remedial work on the neighbouring property could run into hundreds of thousands of pounds depending on the extent of the damage and the nature of the property. A JCT non-negligence policy would protect the employer against their legal liability for damage to any neighbouring property which has arisen as a result of their work.
Why should my client insure against non-negligent acts?
It might seem counter-intuitive to advise clients that they should protect themselves against something which can happen as a result of them carrying out their work correctly. There was a court case in 1958 (Gold v Patman & Fotheringham) which established the legal principle that the Employer has a liability in tort for damage to neighbouring properties where there is no negligence by the contractor.
It is, therefore, important to consider this part of standard building contracts. Public liability is not sufficient and JCT non-negligence cover is the only way to protect against this legal liability.
How do I get a quote for my client?
There is specific information that we require to be able to quote for JCT non-negligence cover and it is what you would expect around the type of work being carried out and, specifically, where there is work which is more likely to cause damage to a neighbouring property (piling, excavations, demolition, underpinning, drilling etc).
We have put together a form for you to use with your clients to collect the information required and we are happy for quotation requests to be submitted on this form or in your own presentation format.
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