We will have discussed with you which is the appropriate Building Contract for
your project. The most common contracts are traditional Building Contracts, such
as JCT Minor Works, Intermediate, or Standard, depending on the scale/complexity
of works. On very small projects, where there is no Contract Administrator
required, we usually recommend Owners use the JCT HomeOwner Building
Contract, without a Contract Administrator, to formalise their agreement and
provide them with some security.
Having established which Contractor you wish to proceed with, and the elements
of work that are to be undertaken, we will then write up the appropriate Building
Contract between you and the Contractor, for each to sign.
This will include the accepted quotation/tender fixed price; start date, completion
date, liquidated damages, and all the contract documents, including the detailed
design package/drawings that the Contractor tendered on.
There are two options for insuring the works. Traditionally the Employer/Owner
insure the works to existing buildings, by informing their insurance company of
the building project, and the insurance company then simply extend the existing
house policy. New builds are usually insured by the Contractor. With insurance
companies reducing their risk, many Owners are finding their existing policy can’t
be extended to insure the building works and in this case, the Contractor will
again insure the works.
Insurance of works and existing structure
This is a complex area, and neither an Architect nor a Quantity Surveyor can
advise on this. Both the Owner’s and the Contractor’s Insurance Companies must
come to a mutual agreement regarding the insurance required to be taken out by
Insurance of the works and existing house
The Contract sets out the Insurance terms. There are three options to choose
- Option A – An all-risk policy – The Contractor insures the works in
joint names. (Normally for new-build only.)
- Option B – An all-risk policy – The Employer insures the works.
(Normally for new-build only.)
- Option C – An all-risk policy – The Employer insures in joint names for
their works, plus a joint-names policy to insure against loss or damage
by the specified perils.
Most owners try Option C, as the works are to an existing building. They find,
though, that their Insurance Company will not let them take out a joint names
policy for the existing property. Therefore they have to adapt the Contract, and so:
- 1. The Builder insures the works in joint names on an all-risks policy.
- 2. The Employer continues to insure the existing property and
contents in their own name, making their Insurer fully aware of the
works and agreements.
- 3. The lack of joint names exposes the Contractor, so they increase
their Public Liability Insurance to cover the risk, and this must also
include none negligent liability cover.