You don’t want to wait until you make a claim to find your contractor doesn’t have sufficient insurances in place!
Insurances can be taken out by the employer (client) or the contractor or by either party in joint names.
The main insurances are Public Liability, Employers Liability and Contractor’s All Risks. The first two are statutory requirements. Contractors all risks relate to the carrying out of the works on site.
If the contractor is expected to take out insurance cover, as a client you should check the following:
- Ensure the policy is in place before the works commence
- Ensure the period of cover is for the whole of the contract period. For contract periods of 12 months or more an existing annual policy will expire at some time. Make a note of the expiry date and ensure the policy is renewed in good time prior to the expiry date. It’s not unusual for someone to forget to renew his or her policy
- If the JCT contract particulars for example, stipulate a minimum level of Public Liability cover, ensure the contractor’s policy reflects that. A policy that states ‘claims in the aggregate’ would be insufficient if the requirement is for ‘each and every claim’
- Ensure the Contractor’s All-risk policy covers the value of the works to be carried out. A policy for £500,000 would be insufficient for a contract sum of £800,000 for example
- Check that any policy exclusions do not apply to your project.