NEC4 Opt C - Are Insurance Premium's part of the Contractor's PWDD or the Direct fee?

The Contractor is wondering whether insurance premium costs, which will appear on a cost ledger as defined cost, form part of the Contractors PWDD within each interim AFP, or should this cost be included within the Contractors direct fee and would therefore be disallowed?


Insurance premiums are not recoverable as Defined Cost, for a cost to be included as Defined Cost it needs to be covered by an item in the Schedule of Cost Components.

The cost cannot be classed as Disallowed Cost either as it is not covered by an item under that definition.

There is a third category of cost which is cost that is neither Defined or Disallowed, it’s simply cost that is not part of Defined Cost.

Insurance premiums fit this category and are therefore also part of the Fee and not reimbursed separately.