The Joint Contracts Tribunal (JCT) has provided contracts for the building industry from the 1950s in order to provide a framework for delivering building contracts.

The current suite of JCTs was revamped in 2011 to include three main variants:

  • Minor Works Contract – for smaller or simple works up to about £250,000
  • Intermediate Works – for medium-sized, more complex contracts between £100,000 and £1,000,000
  • Standard Form JCT – for complex contracts in excess of £1,000,000.

Each of these contracts contains insurance clauses which convey the duties of both the ‘contractor’ and the person engaging them (your client), referred to as the ‘employer’.

The best way to protect your client is for them to insure both the works (the work being carried out under the contract) and the existing structure (the building being worked on, as it stands before the project).

The insurance clauses governing how the property aspects are dealt with under a JCT differ slightly between the Minor Works Contract and the Intermediate and Standard forms of the contract.

Minor works
To best protect your client under the JCT Minor Works Contract, your client and their architect or project manager should select clause 5.4b, which states that the employer shall take out and maintain:

 “…a Joint Names Policy in respect of the existing structures together with the contents of them by him or for which he is responsible for the full cost of reinstatement, repair or replacement of loss or damage due to any of the Specified Perils…
…a Joint Names Policy for All Risks Insurance for the full reinstatement value of the Works (plus a percentage, if any, stated in the Contract Particulars to cover professional fees…
…and shall maintain such Joint Names Policies up to and including the date of issue of the practical completion certificate or, if earlier, the date of termination of the Contractor’s employment (whether or not the validity of that termination is contested). The Contractor shall authorise the insurers to pay all monies from such insurance to the Employer.”

Intermediate Works and Standard Form
To best protect your client under the JCT Intermediate Works or Standard Form Contracts, your client and their architect or project manager should select option 6.7C which states that:

“The Employer shall take out and maintain a joint Names Policy in respect of the existing structures (which from the Relevant Date shall include any Relevant Part to which clause 2.25 refers) together with the contents thereof owned by him or for which he is responsible, for the full cost of reinstatement, repair or replacement of loss or damage due to any off the Specified Perils up to and including the date of the issue of the Practical Completion Certificate or last Section Completion Certificate or (if earlier) the date of termination of the Contractors employment (whether or not the validity of the termination is contested). The Contractor shall authorise insurers to pay all monies from such insurance to the Employer…

 …The Employer shall take out and maintain a Joint Names Policy for All Risks Insurance with cover no less than that specified in clause 6.8 for the full reinstatement value of the Works or (where applicable) Sections (plus the percentage, if any, stated in the Contract Particulars to cover professional fees) and (subject to clause 2.28) shall maintain such Joint Names Policy up to and including the date of issue of the Practical Completion Certificate or, of earlier the date of termination of the Contractor’s employment (whether or not the validity of that termination is contested).”

In the strictest terms of the contract the cover required for the existing structure is specified perils, but it makes no sense to introduce a difference in the cover applicable to each part of the project so we provide All Risks Cover for both.
Please note that options 6.7A and 6.7B refer to new build project. 6.7C will be used where there is an existing structure.