6.5.1 Insurance - Non-Negligence Insurance
What is 6.5.1 Insurance?
6.5.1 is a clause in the JCT 2005 Standard Building Contract, also known as the Minor Works Contract, that makes specific insurance requirements. It is similar to clause 21.2.1 in the JCT 1998 Standard Building Contract.
A construction contract will detail what insurance must be in place and who is responsible for the insurance. In normal circumstances the contractors will require public liability insurance in case they are accused of causing damage or injury, architects, surveyors and designers will require professional indemnity in case there is a problem with the services they provide and contractors all risks insurance will be required to cover loss or damage to the ongoing works. The contractors all risks insurance is normally held by the contractor or jointly by the employer and contractor.
However, these insurances may not help if a neighbouring property suffers damage, such as subsidence or collapse, and the contractors or professionals have not been negligent. In such cases 6.5.1 insurance or 21.2.1 insurance is designed to cover this gap, which is why contracts where there are close neighbours often include these clauses.
For example demolition, piling or excavations can be planned and carried out correctly but the vibrations or disturbance can result in damage to neighbouring properties many weeks later. The neighbour might try and claim directly against you or they may claim on their own insurance, which will then attempt to recover costs from you.
A 6.5.1 Non-Negligence insurance policy can cover the legal costs and damages of such an incident, protecting the employer and contractor from potentially massive costs.
If you have a building project that has close neighbours, especially if there will be excavations, demolition or piling or the use of heavy machinery then make sure your contract includes this clause and that the correct insurance is in place.
If you would like more advice on non-negligence insurance or assistance with 6.5.1 or 21.2.1 policies please contact Sutcliffe & Co on 01905 21681 or email us here