When it comes to your building project, you may need to consider taking out JCT insurance. This is in addition to ensuring that the contractor has public liability and contractor’s all risks insurance and that any professionals you appoint (such as an architect or surveyor) have professional indemnity insurance.
What is JCT Insurance?
JCT stands for Joint Contracts Tribunal and a JCT Contract ensures that the responsibilities and liabilities of each of the parties involved in a building project are clearly laid out. It is designed to protect the client, developers and contractors when an insurance claim arises that is not as a result of negligence.
Why do you need JCT Insurance?
If a neighbouring property suffers any damage as a result of your works as a result of the contractor’s negligence then this should be covered by their public liability insurance, while negligence on the part of the architect or surveyor would be covered by their professional indemnity insurance. If however damage occurs but there was no negligence on their part their policies wouldn’t pay out and this is where JCT insurance comes in.
As an example, if a neighbouring property collapses or subsides as a result of the works you have undertaken, but there was no negligence shown by the contractor or professionals involved, as the employer you could be sued for the costs of rectifying the damage. This leaves you open to the risk of having to pay out tens of thousands in legal bills and/or repairs to the building.
However if JCT insurance is taken out to cover the project then this risk would be covered.
What are the different types of JCT?
Depending on the type of build you are undertaking, there are different types of JCT that are appropriate.
JCT 21.21 – this will protect you against having to pay costs to remedy any damage in the case of a non-negligent incident (i.e. one that couldn’t be foreseen and that no one could be held liable for) that occurs during the build.
JCT 5.4A – in this case the property owner and contractor are both named on the policy for a new build (unlike the contractor’s all risks policy which will only name the contractor).
JCT 5.4 – this is similar to JCT 5.4A but requires that the developer and contractor are named on the building insurance.
JCT 5.4C – again this is similar to JCT 5.4A but in this case it is required that the contractor is added to the home policy, in essence making it a ‘joint names’ policy for the building.
If you’re unsure which type of JCT is appropriate for your project, we can advise as to the most relevant one for your requirements. While JCT insurance can be complicated, at Construction Insure we can simplify the process for you. We have forty years of experience in insuring building projects and our expertise will ensure that you get the right insurance by guiding you through all the industry jargon and small print. Why not give us a call today on 020 3958 6868 to discuss your JCT Insurance requirements?