NEC ECS: Option A - is Employer's liability insurance claimable defined cost?

NEC3 and NEC4 Contracts Compensation Events
1

Option A - is Employer’s liability insurance claimable defined cost?

My subcontractor has argued:
"The Guidance notes published by the NEC state that for the Schedule of Cost components, payments made to people to meet the requirements for the law includes employer’s liability insurance. The Guidance notes that that for the Shorter schedule of Cost Components, that the intention is that amounts paid cover all of the specific items (including 13(i)) listed in the full Schedule of Cost Components.

Therefore Employer’s liability is a claimable defined cost in Compensation Events."

Can anyone provide some guidance please?

2

Generally insurance premiums are not recovered as part of the Schedule of Cost Components and the cost would therefore be treated as included in the fee. Component 7 - insurance provides only for costs to be deducted from Defined Cost and does not mention amounts for insurance premiums.

However, employer’s liability insurance is a requirement of the law and attaches directly to people and therefore can be included as people cost. The Guidance Notes on page 127 specifically identify this form of insurance as falling into people costs.