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Construction Law/CAR Insurance - FIDIC 99 1st Editioon

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Question
Hi Peter,

CAR Insurance.....just need some clarification with regards to the defects liability period and Insurance coverage.

Is there a requirement to have a joint names policy for the Contractor and Employer during the DFL Period to cover ALL of the insurance items required during the Contract Periodand at the same levels of coverage...???

the Contractor is required to take full responsibility for any loss or damage during the DFL period as a result of a defect or outstaniding 'work' at the time of taking over by the Employer.

If he has some outstanding 'work' which is normally minor works is he still required to include the Employer and provide the same coverage..i.e. 3rd Party Insurance / Property Damage etc...???

FIDIC Clauses refer to 'the works' when Taking Over Certifcate is issued and at this time responsibility passes over to the Employer....therefore it is reasonable to imply that the 'Care of the Works' is no longer applicable. and Insurance of 'the Works' also....except for the potential Loss / Damage arising from a defect.

This just leaves the DFL Period Insurance requirements, so if a contractor has a policy in place in his name alone for this period, would this be acceptable....????

Answer
Dear Neil,

Once the Taking Over Certificate has been issued, the Employer is responsible for insuring the works against any damage.  As it is after the issuing of the Taking Over Certificate, the Contractor merely needs insurance as required by legislation and to cover his acts and those of his employees and agents, such as employer's liability, workers compensation, third party, damage to his plant and equipment by third parties, etc. Thus I would see no need for the insurance policy to be in the name of the Employer, unless there is something in the Special Conditions.  

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Peter M. Elliott

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First response to queries regarding extensions of time, variations orders, site instructions and payment using FIDIC and other forms of Conditions of Contract, based on English Law, and derivatives only. Anyone who needs advice about EoT should download and study the SCL Delay & Disruption Protocol www.eotprotocol.com before submitting a question.

Experience

Value . . .
It's unwise to pay too much, but it's unwise to pay too little. When you pay too much you lose a little money, that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing you bought it to do.
The common law of business balance prohibits paying a little and getting a lot. It can't be done. If you deal with the lowest bidder, it's well to add something for the risk you run.
And if you do that, you will have enough to pay for something better.
. . . John Ruskin (1819 - 1900)
"We are too poor to buy something cheap"
.Romanian Proverb 2002
A lean compromise is better than a fat lawsuit. George Herbert (English poet 1593-1633)
I said it in Hebrew, I said it in Dutch,
I said it in German and Greek:
But I wholly forgot (and it vexes me much)
That English is what you speak!" Hunting of the Snark - Lewis Caroll
Match your presentation to the reader!
The joy of food lasts but an hour, of sleep but a day, of a woman, but a month, but the joy of a building lasts a lifetime. Syrian proverb.
Comments and observations leading to improvements in the translation of FIDIC Red & Yellow books into Romanian prior to approval by FIDIC (reference 'Preface to the Romanian edition')

Organizations
Institution of Civil Engineers, Association of Chartered and Certified Accountants, Society of Construction Law, Dispute Resolution Board Foundation

Education/Credentials
B Sc(Hons) in Civil Engineering

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