JCT Clause 6.5.1 Insurance

It seems strange that anyone would need liability insurance to provide protection when they are not negligent. But there is good reason to arrange this type of cover if you are about to embark on construction works on your own property.

Public Liability insurance will only indemnify the Insured Party (normally the Contractor) against damage to third party property which has resulted from their negligence. However it is possible for damage to occur to neighbouring properties during construction works even when no party has been negligent (for example where best practice has been adhered to and method statements strictly followed, and yet still unforeseeable damage occurs).

In these circumstances, due to a legal precedent laid down in a 1958 court case (Gold vs Patman & Fotheringham) the Employer or Property Owner can be successfully sued for the damage caused to neighbouring properties regardless of negligence. From this landmark case JCT Clause 6.5.1 Non Negligence Insurance was born.

The cover is taken out in joint names of the Employer and the Contractor (even though the Contractor cannot benefit from the cover) and is normally recommended by the Employers architect where he/she deems there could be a risk of damage to neighbouring properties. If it’s possible, it is recommended that the Non Negligence cover is arranged with the same insurer who provides the Contractors Public Liability cover as this avoids any potential disputes between the two different insurers on whether the damage has resulted from negligence or not. If both covers are arranged by the same insurer there can be no argument over which insurer is responsible for paying the claim.

JCT Clause 6.5.1 Non Negligence Insurance (previously called JCT Clause 21.2.1 Non Negligence Insurance) covers the following risks which are specifically named in the JCT Contract:

• Collapse
• Subsidence
• Ground heave
• Vibration
• Weakening or removal of support
• Lowering of ground water

Champion Construction Risks have extensive experience in arranging liability insurances for all types of construction contracts, including JCT Clause 6.5.1 Non Negligence Insurance. Please do not hesitate to contact us should you wish to discuss the risks involved in your project.