NEC3: Insurance cost increase

We are 5 years into a 7-year NEC3 Contract and the Contractor has provided evidence of a significant increase in their insurance premiums. This doesn’t seem to be the result of a change in the law and the insurance is specific to the Contract.

Given that insurance is not part of Defined Cost, can the PM do anything else apart from show sympathy and point out that insurances are part of the Fee?


You’re conclusion is correct, under the contract the PM does not have authority to change contractual terms by doing a deal to pay the increased premiums. There would be nothing stopping the Employer from negotiating this with the Contractor either as an ex gratia payment or change to the contract in accordance with clause 12.3.