NEC4 ECC: Difference between additional Employer's Risk and additional compensation event

NEC4 now allows the Client to add additional compensation events in contract data part 1 section 6 (i.e. not something the Contractor has to allow risk for). There is also space to add “additional Client Liabilities” in section 8.

What is the difference between the two? If I as a Client made discovery of asbestos an additional compensation event, or instead made it an “additional Client liability” - what difference does it make?

1 Like

I quote from Richard Patterson’s article (with his permission) in the NEC User’s Group Newsletter of October 2007 (issue No. 40) :

"If an ‘Employer’s risk’ (clause 80.1) occurs, the event is a compensation event and the contractor should be compensated for any effect of the event on both time and on the defined cost of providing the works. Also, because of clause 83.1, the employer indemnifies the contractor against the effect of that event.

As an example one might add, via option Z (additional conditions of contract), a compensation event for a particular level of flooding on a river. If the flood happens, the compensation event would protect the contractor against the time and cost effects of the event of providing the works. If the flood event was included instead as an ‘additional Employer’s risk’ (by including it in the space provided in the contract data), the contractor would also be indemnified by the employer against the cost of the damage done by the contractor’s plant as it was washed down the river."