JCT joint names insurance cost

[JimExtension]

Has anyone here been through the process of obtaining joint names insurance (C and C.1) for an extension they are adding to an existing house?

This is a requirement of the JCT contract we are using, and I'm curious as to the costs that people have paid for this.
If you have been through this would you be willing to share any of the following 1) insurance cost 2) extension cost and 3) house re-build cost?
It would be great to get a feel of the range of prices being given for this.

 

[^woody^]

You need to get quotes.

I suspect, no one else has the same house as you, the same value, the same contents and rebuild costs, lives in the same place, nor has had exactly the same work done, by the same builders, and has not planned their work for the same time.

And you'd be wise to get advice on any joint cover you have via other policies and how this could impact claims. It's not always a good idea to have this type of policy.

There is no requirement to have this cover under JCT. You are free to cross this or any other clause out, as long as both parties agree.

 

[wessex101]

Which version of JCT Contract are you using? For a domestic extension Minor Works Contract is ample and there is no joint insurance provision. Usually the builder would have public liability insurance and the homeowner has cover under their standard buildings insurance. No need for a special joint policy.

 

[JimExtension]

@wessex101 this is the JCT intermediate building contract with contractors design.
It lists this type of insurance in Option C (which is the only applicable option for an extension). A and B are for new builds.

 

[JimExtension]

@^woody^ What are the reasons why this kind of policy might be a bad idea? Thanks!

 

[^woody^]

Fundamentally there are possible conflicts with any existing insurance cover and any new joint names cover. Any claim on the joint policy can affect any existing policy and you being tainted for years to come. The insurer may only pay half of any claim and you be expected to claim half on any other home policy in place at the time.

There is ambiguity on what is covered and there may be gaps in cover. You are also paying twice for policies but not getting extra cover or benefits.

In any claim there must be agreement by both parties to claim. The builder may not agree to a claim or responsibility, and you can't subsequently sue the builder for consequential losses either as he's a joint party to the insurance!

You may be better off insisting that the builder has suitable cover for the risks involved, and then checking with your existing insurer on their requirements. But you probably need specialist advice, rather than just signing up to any policy.

The Intermediate contract seems overkill and over-complex for domestic works. If you are using this contract, then you as the client should really be being professionally advised on other things too.

 

[JimExtension]

@^woody^ thanks that’s really helpful

Would a JCT minor works or standard contract be better for doing an extension.
Our architect is acting as the contract administrator and will be doing the regular valuations, so not sure those require the intermediate contract or if another contract would also allow this?

 

[wessex101]

Surely you have chosen JCT Intermediate with Contractors Design for a reason? Minor Works has no provision for contractors design. But if you have an architect I cannot see where the Contractors Design comes in?
It has been a while since I used it so it may have changed but I often used JCT Intermediate with the traditional Contractors Public Liability with liability up to £5 million for large commercial buildings and the Client's own Buildings Insurance.
To the best of my knowledge you would only need a new joint names policy for very high value work or a very complicated development on a multi occupier building. But like I said I'm a bit out of the loop on current contract law.

 

[^woody^]

The contract is typically chosen based on the complexity of the project, not necessarily the type of work or value. I regular use MW on £1m + contracts which are simple in scope.

Think about what "design" the contractor is expected to do. Design can be done under any contract - normally specified in the documentation, but not necessarily so.

There is a JCT homeowner contract which is intended for extensions and domestic refrurbs. The FMB also have one.

You don't need a lot of contractual mumbo-jumbo. You can write your own simple contract, with the scope of the works and specification, responsibility, key dates, payment terms and defect liabilities and that's as good as anything. And you can take any contract and add or omit what you like. You just both have to agree to it.

Generally, the Specification and Schedule of Work are the main things to concentrate on, as if those are good, many things are automatically implied into your contract - and that does not mean a written contract either -it can be verbal and the responsibilities still get implied. But the key thing is that the Schedule of Work sets out exactly what the contractor has to do and there is no ambiguity at all if the schedule is properly written.

 

[mrrusty]

I'm not so familiar with JCT, but think the JCTs I have been in contact with, mainly with the MW form, are not as straightforward to understand as the NEC suite of contracts which I am much more used to.

Maybe just my opinion, but if you have an opportunity look at the NEC engineering and construction short contract which is designed for domestic extensions, or if there is lots of contractors design even the full ECC. Very easy language, and the compensation event system for pricing variations is straightforward. Given a choice, I would use NEC every time.

And, as above, all contract forms are just a basis for whatever you want them to say. In NEC contracts you add Z clauses to vary the standard form, so a Z clause might just say "delete clause XXX and add XX1- 'bla bla bla'"

Perhaps the biggest difference is that IMHO JCT contracts are more traditional and a bit adversarial, whereas NEC are designed to be collaborative from the outset. The method of structuring "early warnings" works well as a method of giving a "heads up" when things are changing that might cause cost or delay changes and really help to inform whether an actual compensation event is necessary.

 

[cdbe]

Your standard household insurance policy will not automatically cover you while conducting building works - some even consider a replacement kitchen enough to void the policy. Most will usually extend the cover but obviously at an additional premium.

 

[mrrusty]

Your standard household insurance policy will not automatically cover you while conducting building works - some even consider a replacement kitchen enough to void the policy

This is true - always read the small print because they are all different. My own policy (NFU) only requires we inform them for projects >£50K


"If YOU plan to carry out any work to improve, renovate, extend, build or demolish any part of the BUILDINGS
where the estimated cost of the works is in excess of £50,000, YOU must inform US at least 21 days prior to the
commencement of the works and before YOU enter into any contract for the works. WE may consequently amend
the terms of this POLICY. If YOU do not advise US of such works WE will not have to pay any claim caused by or
resulting from the works. YOU do not need to inform US if the work is for redecoration only."