JCT contracts—insurance of the works
Produced in partnership with Fladgate LLP
JCT contracts—insurance of the works

The following Construction guidance note Produced in partnership with Fladgate LLP provides comprehensive and up to date legal information covering:

  • JCT contracts—insurance of the works
  • What are the insurable interests in the works?
  • A joint names policy
  • All risks compared to specified perils
  • The Excepted Risks
  • Position of sub-contractors
  • Consequences of an insurance event
  • Insurance taken out by contractor
  • Insurance taken out by the employer

This Practice Note relates to the insurance provisions in the JCT Standard Building Contract, 2011 and 2016 editions.

What are the insurable interests in the works?

The employer has an insurable interest in the works by virtue of owning the land and the works.

The contractor has an insurable interest in the works by virtue of being in possession of the site and its obligation to complete the works. The contractor retains possession of the site and the works until the practical completion certificate is issued and the employer is not entitled to take possession other than in accordance with the contract. This is stated specifically to be for the purposes of the works insurance (clause 2.4).

For further information about insurable interests, see Practice Note: Insurable interest.

As both parties have an interest in the works, the insurance policies taken out to insure the works are required to be in joint names.

A joint names policy

A joint names policy is defined to be a policy which names the employer and the contractor as composite insured. This means that each has the benefit of the insurance policy as if they were separately insured. The significance of this is that if one party negates the insurance for any reason, the other party is still entitled to insurance cover. See Practice Note: Joint