Contractors' insurance

Standard TPL insurance protects against common law liabilities only. Where these agreements extend liability beyond common law obligations, contractual liability insurance coverage is required. This can be provided under annual insurance programmes but these must be very carefully drafted by a specialist insurance broker. Alternatively, project specific contractual liability coverage can be tailored to transfer this risk, it is also available through specialist construction brokers.

Basic PI policies only cover professional negligence and this would need to be demonstrated to claim successfully. Some more onerous wordings exclude liabilities arising under FFP obligations and this can also exclude losses even where there has been a negligent act. A high quality PI wording will cover civil liabilities and this will include FFP obligations, subject to some conditions and qualifications. A specialist construction insurance broker will be able to guide you through the coverage options available.

As the defects rectification period has passed there will be no cover under the Construction All Risks (CAR) policy for this project. Your third party liability (TPL) policy should respond in relation to legal liability for the loss of contents. Cover for the damage to the building itself (along with consequential loss) will depend on whether your TPL policy has been drafted to include liabilities arising from completed contract works and contractual liability. This is a very complex area of TPL coverage and one which is critical in delivering value to the policyholder. A specialist construction insurance broker will be able to guide you through the coverage options available.

You should consider an owner controlled insurance programme (OCIP) where the owner arranges these insurances from the commencement of demolition to continue through until completion of the fit-out works, and is designed to meet the needs of all stakeholders involved.