The following Property guidance note provides comprehensive and up to date legal information covering:
As between the developer and the tenant, the developer should covenant:
to ensure that the developer’s works are insured against usual risks for the full reinstatement value of the works together with all proper professional fees incurred in connection with reinstatement, and also the costs of building demolition and site clearance: that cover must endure until practical completion is achieved
to use the insurance monies to reinstate any developer’s works that are damaged or destroyed; if those monies are insufficient to meet the full cost of reinstatement, the tenant will expect the developer to make good any shortfall out of its own pocket
For the developer, it is important that, so far as possible, the developer’s insurance obligations should be limited to the matters which are covered by the contractor’s all risks (CAR) policy which will be required under the building contract, and which may be taken out by either the developer (as employer) or the building contractor, although the latter more usually does so because it carries such cover in the ordinary course of its business. If the building contractor takes out the policy, the developer will want to be a joint insured under it.
The CAR policy will typically cover:
the building works whilst they are in progress
unfixed goods and materials on
**excludes LexisPSL Practice Compliance, Practice Management and Risk and Compliance. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
Take a free trial
0330 161 1234