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NEC3 ECC: Insurance excess

+1 vote
Under ECC Option C, Is the Contractor entitled to claim insurance excess if a claim arises through no fault of the contractor on the original scope of works?
asked Mar 31, 2015 in Risk and Insurance by anonymous  

1 Answer

+1 vote
Best answer
Fault does not come into it. It comes down to risk allocation under the contract. If the Contractor incurs Defined Cost in providing the works even if it is for an insurable event, then at first level, they are reimbursed it. However, under clause 7 of the Schedule of Cost Components, the cost of events for which the Contractor is required to insure are deducted. The excess / deductible is stated in Contract Data Part 1 by the Employer, so the Contractor is reimbursed up to this amount, but then has to bear the remainder of the costs above this amount.
answered Apr 7, 2015 by Jon Broome Panel Member (64,190 points)  
Also clause 85.4 is relevant : "Any amount not recovered from an insurer is borne by the Employer for events which are at his risk and by the Contractor for events which are at his risk."