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NEC3 ECC: Insurance excess related to a compensation event

+1 vote
Under ECC Option C, a claim arises following compensation event works. The Contractor carried out the CE works competently and in accordance with scope of works. Client raised no issue with the works while supervising and was satisfied with the works when they were complete. Is the contractor entitled to recover the insurance excess directly related to the CE and if so, is a separate CE required to recover the excess?
asked Mar 31, 2015 in Risk and Insurance by anonymous  

1 Answer

+1 vote
Best answer
An 'excess' implies that an insurable event has happened, but you do not say what sort of event it is and when it happened.

Most insurance type events are borne by the Contractor (see clause 84) and therefore would not be an additional compensation event. If it is to be a an additional compensation event then it would probably be covered by one fo the bullet points in clause 80.1.

Clause 7 of the Schedule of Cost Components deducts from Defined Cost those costs which the contract requires the Contractor to insure. This however, would not include the excess stated in the Contract Data Part 1 by the Employer, so you would be entitled to this amount plus Fee as Defined Cost and, if it was a compensation event, for the target Prices to be adjusted by the same amount.
answered Apr 7, 2015 by Jon Broome Panel Member (64,190 points)