Depending on the type of build you are undertaking, there are different types of JCT that are appropriate.
JCT 6.5.1 (Non-Negligent Liability) – this will protect you against having to pay costs to remedy any damage in the case of a non-negligent incident (i.e. one that couldn’t be foreseen and that no one could be held liable for) that occurs during the build.
JCT 5.4A – Contractor to insure the works (New Build where there are no existing structures) in joint names for ‘all risks’ in this case the property owner and contractor are both named on the policy (unlike the contractor’s all risks policy which will only name the contractor).
JCT 5.4B – Employer to insure the works (Works to existing structures) in joint names for the works on an ‘all risks’ basis and cover for the existing structures/contents for a JCT ‘specified peril’ being Fire, Lightning, Explosion, Storm, Flood, Escape of water from any water tank, apparatus or pipe. Earthquake, Aircraft, Riot and Civil Commotion.
JCT 5.4C – Insurance of the Works and Existing Structures by ‘other means’. Prior to the 2016 JCT suite of contracts, clause 5.4C required 2 separate policies (1) Employer insuring the existing structure in its own name and (2) Contractor insuring the works in its own name which raised a number of issues such as:
Contractor not being noted on the existing structure as a joint insured meant that the contractor’s public liability policy was liable for damage/losses due to their negligence
The cost of arranging appropriate cover for the Employer/Homeowner was prohibitive
The complex nature of the works ie, the works involved by the tenant or tenants on a multi-let property being unable to insure the existing structure as the freeholder is responsible for insuring the building.
The 2016 amendments addressed these difficulties giving the Employer and Contractor the opportunity to arrange their own insurance solutions, hence the term insurance of the Works and Existing Structures by ‘other means’. Should this option be the route to go down, options 5.4A and 5.4B need to be deleted from the Contract Particulars and by stating that Clause 5.4C applies. Additionally, both Employer and Contractor are required to confirm that alternative/bespoke arrangements have been agreed upon and need to advise/consult their insurance advisors prior to this before tender stage and also, if the Employer is a tenant with the landlord responsible for insuring the existing structures, they also need to be consulted at this stage.
Larger Contracts – 2016 JCT D&B Contract
JCT 6.7A – New Build – All Risks Insurance of the contract works by the contractor in joint names
JCT 6.7B – New Build – All Risks Insurance of the contract works by the employer in joint names
JCT 6.7C – Works to Existing Structures/Contents by the employer in joint names including a waiver of subrogation rights awarded to the contractor
C1 – Existing Structures/Contents – Specified perils
C2 – Works – All Risks