Level 2 - Project Administration Flashcards
What is the difference between Project Administration and Project Process and Procedures?
Project Administration
- Identifying and implementing the contractual, legislative and statutory requirements needed for a development.
- Managing document control and information management systems.
- Managing reporting systems.
Project Process and Procedures
- Preparing a project execution plan.
- Conducting a development appraisal or feasibility study.
- Reporting on project processes and procedures.
- Reporting on project performance.
What is insurance?
Insurance is an agreement stating that the insurer will give the insured a benefit (usually financial) if a specified event occurs.
What types of insurances are required in construction projects?
- Employer’s Liability Insurance
- Public Liability Insurance
- Professional Indemnity Insurance
- All Risk’s Insurance
What is All Risks Insurance?
• Insurance of the building works.
• Covers physical loss or damage to works and materials on site.
• This can be taken out by the Contractor or Employer, contract should specify who.
• Contract usually defines this should be taken out in joint names (Employer and Contractor insured under the same policy).
• Covered under Schedule 3 in JCT D&B:
o A: Contractor – All risks.
o B: Employer – All risks.
o C: Employer – insures existing structures and works or extensions to them.
What is Employers Liability Insurance?
- Covers the liability of an employer for any illness, injury or death suffered by an employee.
- All UK employers are required to have this insurance by law.
What is Public Liability Insurance?
- Provides cover for damages or compensation arising from accidental injury to third parties or property in connection to the project.
- Contractor to provide for the duration of the works.
What is Professional Indemnity Insurance?
• Insurance against liability arising from professional negligence, such as breach of a contractual obligation to exercise reasonable skill, care and diligence.
• Will include a limit of indemnity and should be on the ‘each and every claim’ basis. This means that the cover amount is capped for a single claim but multiple claims can be made during the policy with no overall limit (‘in the aggregate’ sets overall limit e.g. £10m limit would be reached with two claims of £5m during the policy duration).
• ‘Claims made’ basis means that the policy in place when the claim is made is engaged, not the policy in place when the works in question were carried out.
• RICS require members to have a minimum of 6 years run off cover due to the ‘Claims made’ basis.
• A copy of the certificate must be sent to the RICS on an annual basis.
• How to get a competitive quote:
o Start renewal process early 6 weeks ahead of date.
o Ensure proposal form demonstrated food risk management policies.
o Ensure the broker understands what you do and how you do it.
Minimum levels of Professional Indemnity Insurance (PII) cover?
The minimum cover is based on turnover:
• Up to £100k -£250k
- £100k to £200k - £500k
- Over £200k - £1m
The cover must be appropriate for the particular type of work and circumstances.
What is a ‘net contribution clause’?
A contract term stating that, where more than one person is liable for the same loss or damage, the contracting party’s liability will be limited to the fair and reasonable amount that a court would apportion against it.
For example if an architect and engineer were jointly responsible for a defect:
- With a net contribution clause in the architect’s professional appointment, if the client claimed damages for a defect from the architect alone and a court found the architect only 60% liable, the client could recover only 60% of its damages.
- The client would have to claim the remaining 40% of its damages separately against the engineer.
- If the engineer was insolvent and unable to satisfy the client’s claim, the client could recover only 60% of its total damages.
- Faced with net contribution clauses in key documents, a client (or the beneficiary of a suite of collateral warranties or third party rights) must claim against all the responsible parties and take the litigation and insolvency risks associated with its claims.
A professional consultant may argue that a net contribution clause:
Is fair, whereas the common law position of 100% liability without 100% responsibility is unfair.
Prevents the risk of one professional consultant’s insolvency transferring to another professional consultant (or its insurers).
A client may argue that a net contribution clause:
Seeks to circumvent an established rule of common law.
Transfers insolvency risk to the client, in circumstances where it cannot insure against that risk.
Only ever limits the liability of a party who has already been found to be at fault.
Is not acceptable to a funder providing development finance.
What are excess provisions?
A clause that means the insurer is only liable for the remaining claim amount after all other sources of cover have been claimed against.
How would you client be protected from contractor insolvency?
Performance Bond or Parent Company Guarantee (see Contract Practice).
What types of surveys are required for construction projects?
- Ground investigation
- Existing services
- Existing structure
- Arboricultural (tree) survey
- Daylight / sunlight survey
What is Rights to Light?
- Protects owners and occupiers of existing buildings right to natural light and prevents new developments blocking this.
- The owner of a building with windows that have received natural daylight for 20 years or more is entitled to forbid any construction or other obstruction that would deprive them of that illumination (under Prescription Act 1832).
- Just over half a room should be lit by natural light.
- Now done by 3D computer modelling.
What is a Party Wall?
If you intend to carry out building work which involves one of the following categories you must comply with the Party Wall Act (1996):
- Building a free standing wall or a wall of a building up to or astride the boundary with a neighbouring property.
- Work on an existing party wall or party structure or building against such a party wall or party structure.
• Excavating near a neighbouring building.
If the work falls within the Act then all Adjoining Owners must be notified.
When do you need planning permission?
- build something new
- make a major change to your building, e.g. building an extension
- change the use of your building
