Choosing the best Party Wall insurance
The Party Wall Act 1996 provides a framework for preventing and resolving disputes in relation to party walls, boundary walls and excavations near neighbouring buildings. Any building owner proposing to start work covered by the Act must give adjoining owners notice of their intentions in the way set down in the Act. Getting this wrong could delay your build and make your project more costly.
Adjoining owners can agree or disagree with what is proposed. Where they disagree, the Act provides a mechanism for resolving disputes. The Act is separate from obtaining planning permission or building regulations approval. Under the Party Wall Act, any damage to an adjoining property must be rectified by the building owner to their own cost. Any damage that results from a contractor’s negligent work should be covered under their all risks insurance, and any defective design by the architect will be covered under their professional indemnity insurance. There is additional cover available for the employer called non-negligent damage insurance.
Peter Richardson is a Director at Sennocke International Insurance Services works with the Self Build-Zone and Build-Zone brands and overall responsibility for construction insurance. In this blog and as recently featured in the December issue of BuildIT Magazine, Simon talks us through the best Party Wall insurance and whether it’s worth having for private small-scale residential schemes.
Non-negligent Party Wall cover provides cover for the client (property owner) during the instance when there is damage to a third-party property as a result of renovations works – and no one person/professional can be found to be at fault. Non-negligent insurance is derived from clause 6.5.1 of the Joint Contracts Tribunal (JCT) Standard Form of Building Contract.
This requires insurance to be arranged in the joint names of the employer (the people who own the building) and the contractor which protects employees in respect of their legal liability for injury or damage to any property (other by the damage caused by negligence of the contractor or sub-contractor).
This insurance provides protection against the employer’s liability for expense, liability, loss claims or proceedings that arise due to non-negligent damage to the property whilst undertaking a building contract – other than the contracted works. This could be due to collapse, subsidence, heave, vibration, weakening or removal of support or the lowering of groundwater.
Any loss must be unforeseen. For example, if, in the opinion of a building professional, damage is inevitable because of a proposed method of demolition, then a non-negligible insurance policy would not provide indemnity. In this kind of situation, the employer and contractor must find an alternative way of doing the work to avoid such foreseeable issues.
This insurance is best purchased through the contractor because their policy is better suited to provide it. But the employer is responsible for paying the premium and any excess. It’s essential you make sure the contractor’s cover is appropriate, as not all public liability insurers will be prepared to do this and a stand-alone policy may be needed if that should be the case.
Premium cost depends on several factors, such as the limit of the indemnity required, contract value and length, proximity of other properties to the proposed works, including depth of excavation or piling and depth of groundwater that needs removing.
Still got questions? Contact us today and one of our experts can provide further advice and guidance.