When arranging building works on a property, the property owner – or Employer – has a responsibility towards neighbouring properties that it may be supporting directly via an adjoining wall, or indirectly, via the support of its foundations.
Even though the contractor working on the property is competent and carries out their work safely and correctly, the work may still affect a neighbouring property, or another part of the property being worked upon.
As public liability policies cover negligence, and the contractor has acted competently, damage caused by their work will not be covered.
As contractors all risks policies cover the works only, damage to existing properties will not be covered.
As existing structures cover is arranged on a specified perils basis, again, damaged caused by the contractor’s work will not be covered.
Clause 21.2.1 / 6.5.1 can be found in the building contract. This Clause states that the main contractor should arrange non-negligent damage insurance in joint names with the employer.
The wording of this insurance cover will be along the lines of the following:
This insurance provides indemnity in respect of any expense, liability, loss, claim or proceedings which the Employer may incur or sustain by reason of injury or damage to any property happening during the period of insurance and caused by collapse, subsidence, heave, vibration, weakening or removal of support or lowering of ground water arising out of, in the course of, or by reason of the carrying out of, the works.
This insurance is usually arranged by the main contractor to the limit recommended by the architect in joint names with the employer.
A contractor was undertaking demolition and refurbishment works at three 18th century properties.
Two of these were to be demolished and rebuilt while the third was to be underpinned and refurbished.
In the property being refurbished, plaster was removed from a section of brickwork and shortly after this a section of brickwork actually fell out of the chimney. Cracks developed and after two weeks, damage was at such a level that a Dangerous Structure notice was served, resulting in a requirement for demolition of the property.
The advice of expert engineers was sought, and the opinion was that collapse was inevitable, although this could not have been reasonably foreseen. Therefore, indemnity was provided under the non-negligence policy.
The total claim payment was £993,903 including £7,402 expenses.
A contractor was carrying out the conversion of a 100-year-old shop and flats into a doctor’s surgery.
The works involved removal of the existing roof from both buildings, demolition of internal walls and floors and construction of a new wall. There was also some underpinning. The first sign of damage was cracking in the bathroom of a neighbouring property sharing a party wall.
An engineer’s inspection concluded that vibration / foundation adjustment from the underpinning work was responsible for the cracking. Generally, the re-adjustment of foundations after underpinning does not result in significant cracking to buildings. However, the conclusion was that damage occurred as a result of the underpinning and vibration by the works.
The claim was settled for £275,000
For a quotation or advice about arranging JCT non-negligence cover, please get in touch with Yutree at firstname.lastname@example.org or call us on 01638 660651