INSURANCE

Question 1

1. During construction what insurance(s) are required under the terms of an ABIC contract?

Answer 1

Public Liability Insurance, Contract Works Insurance, Worker’s Compensation (contractor)

Question 2

2. Which party provides these insurance policies?

Answer 2

The contractor (unless stated otherwise)

Question 3

3. Who must hold them?

Answer 3

The contractor

Question 4

4. When must the policies be taken out and for how long?

Answer 4

As soon as the contractor takes possession of the site/ once contract is signed until Final Certificate.

Question 5

5. When and to who are the insurance policies transferred if at all?

Answer 5

At Practical Completion these insurances are taken over by the owner.

Question 6

6. How are these insurances documented and who holds the documentation?

Answer 6

The insurance documents or a statement in writing of the provision of these insurances should be given to the architect following signing of the contract. This is provided by the party to the contract taking out the insurances.

Question 7

7. What is the relationship between the architect’s actions and ‘acts of god’ clause?

Answer 7

The architect should obtain advice from the PII insurer on how to deal with this.
If the works can no longer be continued due to this, then the contract is frustrated.
Where only partial damage is caused, the contractor’s Home Warranty Insurance should cover this (contractor to contact insurer for advice on how to remedy).

Question 8

8. Does the insurance policy for the works cover a situation where damage to the works occurs as a result of negligence by the contractor?

Answer 8

Yes, contract works insurance covers for negligence by contractors on site.

Question 9

9. What happens when there is a break in on site and tools to the value of say $1500 are stolen?

Answer 9

Contract works insurance generally covers items on site used for building (tools, equipment etc). The contractor should ensure their policy covers this.

Question 10

10. Consider a domestic alteration where the roof is partly removed and covered with tarpaulins by the contract (as part of the works) but during a rainstorm water gets inside and damaged the carpets and furniture in the parts of the residence not subject to the alteration works? Is this damage covered by the “works” insurance policy?

Answer 10

Yes, the contract works insurance will cover accidental damage by external causes (i.e. water, fire, theft etc.)