Contract insurance

Last edited 9 August 2017

The period of time that contract works insurance is required under ABIC-2008/2011 contracts to final certificate may be causing some confusion.

The Institute strongly recommends that architects should not give insurance advice. There is anecdotal evidence that architects are responding to client queries, or worse, are volunteering that the ABIC 2008 version means that the client does not need their own insurance between issue of the notice of practical completion and issue of the final certificate.

Clause E2 Contract Works Insurance is common to MW and SW 2008 and 2011 versions of the contract. It states that whichever party is required to take out contract works insurance they must keep that contract works policy in place until 4pm on the date the architect issues the final certificate .

Typically it is the contractor who takes out contract works insurance, but ABIC gives the option in the schedule - see item 13 of schedule 1 in MW and item 12 of schedule 1 in SW.

Bear in mind that, under a typical contract works policy, irrespective of who took out the insurance, either party under ABIC can--if there's a claim--pay the excess to ensure the claim is covered. Clause E10 allows the party who pays the excess to have that amount reimbursed to them, to the extent that the other party is at fault. See the specific wording of clause E10. The architect can then capture this adjustment in the next, or the final, certificate.

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