Insurances Flashcards
What are the 2 types of insurance and explain the differences between them?
Liability and Loss
Liability (employers liability and public liability)- Personal injuries, death or damage or property of third parties and employees
Loss- protects against unforeseen loss or damages to the works or building
What construction risks need to be considered by contracts?
- breach of contract
- terrorism
- injuries and death
- theft
- damage to community
What is the reason for insurance in a standard form of contract? What are the main risks to a project (in relation to health and safety)?
Protects both the client and contractor should liability or loss occur. Provides third party protection against risks.
Biggest risks would be accidents to contractors working on site.
Explain the difference between indemnity and insurance?
Insurance - guarantee for compensation
Indemnity - a promise to protect the other party from claims for damages by a third party
Explain the different types of works insurance required under JCT 16. What is the length of cover required and why?
3 options A,B,C
A&B are for new buildings - All Risks Insurance in joint names. A is for the contractor to take out the insurance and B is for the employer to take out the insurance.
A,B and C Must be taken out until the issue of practical completion certificate.
C is for existing structures - insurance to cover damage to both contract works and existing building
Name 2 insurances required by UK law.
Employers liability and car insurance
Why is it important that QS’s advise a client on the insurance provisions required? What should you look for when assessing the cover?
To protect both the contractor and the employer from claims.If you don’t advise then you will be seen to be negligent. Need to advise them on amount it covers and time scales.
When assessing cover need to see evidence and previous experience can affect the policy - levels of excess.
Who is responsible if damage to adjacent property occurs but neither the employer or MC are negligent?What can the employer do to cover this risk?
Non negligent insurance can be taken out in joint names in order to protect from this.
If the employer has paid for materials on site which are subsequently stolen who is liable for their replacement (JCT SBC 16) and why?
Depends on the works insurance option
A - MC
B - Employer
C- Employer
What if the insured goes bankrupt and you have a right to claim against him? What if the insured has missed a payment?
You will have third party rights to claim from the insurer but can only claim the same rights that the contractor would have had.
If they have missed a payment the insurance would be nul and void.
If the risk holder does not take out the insurance what can you do? Who is liable for any shortfall and why?
Take the insurance out yourself, could do joint names.
You would then deduct the costs of the insurance form the next interim valuation.
Why do standard forms of contact ask for policies to be taken out in joint names?
Joint names protects both parties in the contract.
What is the difference between all risks and specified perils?
All Risks- any physical loss or damage to work executed and site materials.
Specified perils- catastrophes e.g. fire, flooding, storm
What are excepted risks?
riots, war, radiation, invasions
Explain the reinstatement procedure for works insurances option A and B.
Option A - payment by the employer will not exceed what is received from the insurer
Option B- treated as a variation
