Contract Works for Timber Framed Construction
Contract Works Insurance can help pay to repair or redo work that's been damaged by an insured event, such as fire, flood, storm, vandalism or theft.
Our Contract Works Insurance product available through our Specialist Risks team is suitable for construction projects which feature timber-framed construction methods. It's commonly understood within the construction industry that timber-framed construction is 'standard', which in the construction world is correct as it's a practice that's been used for a while. Within the insurance world, this is not the case, as many insurers will deem timber-framed construction as 'non-standard', with many needing notification of the use of timber-framed building systems.
Construction projects can be complicated undertakings, and if any problems were to arise before the project is completed, things can become difficult to resolve.
There are a number of damaging incidents that could occur over the course of a building project, and it is essential that everyone involved has the proper insurance as well as understands their liability and insurance responsibilities. That is why, as a subcontractor, contractor, tradesperson, employer or even a client, it is essential that you understand why Contract Works Insurance (CWI) is important for any building project.
What is Contract Works Insurance for Timber Framed Construction?
Contract Works Insurance for Timber Framed Construction provides cover for work that is in progress at the building site, for defects found during final testing and for issues during handover. Contract Works Insurance may also require the project to be insured for a specific time after the handover, typically 14 days. In addition, CWI can pay to repair or redo work that has been damaged by an insured event as well as replace building materials that have been damaged. Depending on the scope of your building project, the cover can be extended to include the plant used in the building process.
Your Contract Works Insurance policy can be arranged for a specific contract or on a blanket annual basis for all building jobs that meet certain requirements.
Types of Timber Covered
Our Contract Works Insurance for Timber Framed Construction covers various types of timber and brick-clad timber construction methods including:
- Glued Laminated Timber
- Cross-Laminated Timber
- Structural Insulated Panels
- Timber Roof Systems
- Timber Floor Systems
What are the Extensions?
Depending on your building project and its potential risks, you may want to supplement your Contract Works Insurance policy for Timber Framed Construction with extensions to close any insurance gaps. Even though your cover options will vary by your insurer, the following list provides a beneficial overview of what options could be available.
- Professional fees incurred in the reinstatement of the works
- Restoration of plans or drawings
- Expediting expenses, such as overtime
- JCT contract conditions
- Off-site storage
- Debris removal
- Public authority requests
What are the Exclusions?
No matter how comprehensive your Contract Works Insurance (CWI) policy may be, there are a handful of exclusions that are shared by most insurers. These common exclusions include the following:
- Loss or damage caused by defective design, material or workmanship
- Policy excess
- Inventory losses
- Wear and tear
- Any consequential losses, including penalties for delay
- Pollution and contamination
How Does Contract Works Insurance Impact the Main Contract?
The most complex components of CWI policies are the details associated with JCT contracts. Whilst there are several different versions of these contracts, for the purposes of this article, we will be explaining the JCT 2011 standard building contract. However, you may use whichever version you prefer — there is no requirement to use the newest JCT contract. Just be aware that your contract may be organised differently.
There are several important clauses included in a standard JCT contract that you should be aware of before you sign it. These clauses all fall under clause 6, which outlines the contractual responsibility and liability of each party in the contract.
- Clause 6.1: States that the contractor is responsible and requires it to indemnify the employer for any expense, liability, loss, claim or proceedings that arise from personal injury or death caused by the work carried out during the building project. The only exception to this is if the personal injury or death is due to any act or neglect by the employer.
- Clause 6.2: Like clause 6.1, clause 6.2 requires the contractor to indemnify the employer for property damage, which only includes the structure on the building site. However, the clause does exclude damage to the building materials and damage to any existing property of the employer. The contractor is only liable if the property damage is due to negligence, breach of statutory duty, omission, or default.
- Clause 6.4: Requires that the contractor take out and maintain insurance for the duration of the building project that covers their liabilities under clauses 6.1 and 6.2, which would include employers’ liability and public liability.
- Clause 6.5.1: Specifies whether the non-negligence cover is required. The contract may require the contractor to purchase additional insurance to cover injuries or damages caused by collapse, subsidence, heave, vibration, weakening or removal of support, or lowering of groundwater. The cover is simply known as JCT clause 6.5.1 insurance.
- Clause 6.7: Refers to schedule 3, which contains three options for insurance. The specifics of the building project and the preferences of the individual drafting the contract—generally the employer or the architect—will determine which of the options will be chosen. The options are as follows:
- Option A: Applies to contracts involving the erection of new buildings and requires the contractor to take out a joint names policy.
- Option B: Applies to contracts involving the erection of new buildings and requires the employer to arrange the insurance.
- Option C: Applies to contracts involving alterations to existing buildings and requires the employer to arrange the insurance.
- Clause 6.8: Outlines the extent of the CWI policy and its permitted exclusions. The policy is required to provide insurance for the works and building site materials. It should be noted that, under the contract, building site materials are defined as ‘materials delivered to and placed on or adjacent to the works’. Even though it is listed as an extension, the policy must also include the cost of debris removal and any shoring or propping up of the works after damage.
Provide Cover for Your In-Progress Build
All building sites — regardless of size and complexity — are vulnerable to numerous risks. It does not matter what your role is on the building site — whether it’s as the employer, contractor or client — you should have a plan for when a risk does occur.
CWI is an integral component to ensuring that even if a disaster were to strike, it would not halt or completely stop progress on the building project. For more information about how you can protect your building project, contact the professionals at Inspire Insurance Services today.
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