Civil Engineering Reference
In-Depth Information
14.2 Insurance under the SBC and the SBC/DB
14.2.1 Introduction
heSBCandtheSBC/DBimpose(or,insomecases,giveanoptiontoimpose)obli-
gations to take out and maintain insurance covering the following risks:
•
personal injury and death (see Section 14.2.2);
•
damage to property (other than the Works) arising from the Contractor's default
(again, see Section 14.2.2);
•
'non-negligent' damage to property (other than the Works) (see Section 14.2.3);
•
damage to the Works (see Section 14.2.4).
Insurance against the risk of loss of liquidated and ascertained damages (formerly an
option pursuant to clause 22D of JCT 98) is no longer to be found within the SBC or
the SBC/DB, largely due to the limited scope of cover which has been available and
the low level of use (though see the comments on Project Insurances in Section 14.6).
Excepted Risks are excluded from the obligation to insure (see Section 14.2.9).
There are certain types of insurance cover not provided for by the SBC or SBC/DB,
for example, latent defects insurance (see Section 14.5). A well-advised party to a con-
struction contract will consider whether any such (and other) risks should be covered
by insurance.
14.2.2 Insurance against injuries to persons or damage to property
Under clause 6.4 of the SBC and SBC/DB, the obligation to insure against the death
of, or injury to, any person or loss of, or damage to, any property arising out of or in
consequence of the execution of the Works is imposed on the Contractor. his reflects
the indemnity given by the Contractor under clauses 6.1 and 6.2 for such injury, dam-
age or loss (see Section 14.1.6). 14.1.6).The cover is usually contained in two separate policies,
namely, a public liability policy and an employer's liability policy.
Insurance relating to personal injury or death of an employee of the Contractor
must comply with the Employers' Liability (Compulsory Insurance) Act 1969 which
specifies a statutory minimum level of cover, currently £5 million, see regulation 3(1)
of the Employers' Liability (Compulsory Insurance) Regulations 1998.
Insurance cover in respect of the death of, or injury to, other persons and loss
of, or damage to, property will be effected under a public liability policy. The min-
imum amount of public liability cover in respect of any one occurrence should be
stated in the Contract Particulars. The insurance must remain in force until practical
completion.
14.2.3 Clause 6.5.1 insurance
There is a further option open to the Employer under clause 6.5.1 of the SBC and
the SBC/DB. his insurance need only be taken out by the Contractor if the Contract
