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NEC ECC: If the insurance policy for the Contractor expires after completing the works,, how would this be dealt with under the NEC3 ECC contract??

0 votes
Would insurance be required when the Contractor completes the works? Also how would this normally be addressed in the contracts?
asked Jun 15 in Risk and Insurance by Samatar (210 points)  

1 Answer

+1 vote
Yes it is: see clause 85.1 which requires the Contractor to maintain insurances up to the defects date.

If the the Contractor does not take out insurance as required by the contract then, under clause 86.1, "The cost of this insurance to the Employer is paid by the Contractor", which, if X16 retention is specified, would come of the final payment.

In reality, it seems that, particularly for Professional Indemnity and Loss of or damage to the works due the Contractor (normally part of the Contractor's all risks insurance), Employers/Clients want this to maintained under the end of the statutory liability period which is 6 or 12 years and normally the latter, so add in a Z clause to make it an obligation.
answered Jun 15 by Jon Broome Panel Member (65,620 points)  
What would be the best course for the Project Manager to solve the issue before clause 86.1 applies? Would an early warning suffice to notify contractor to update his policies?
Yes, as the first step and then if they fail to take action, actually do it.