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We are doing water transmission project in Bahrain. in this contract the DI pipes supply by client. In insurance consultant asking to insure the client materials also but in tender stage we don't know the value of the client materials and we didn't consider it Insurance Item in BOQ price.

Is this client materials insurance our obligation or not  and if we can claim that additional premium charges from client for that client materials insurance.

please reply me.

ANSWER: Dear Chamara,

You do not mention the form of contract nor the applicable law, so the following comments will be generic.  

It all depends what it says in the Contract.  Normally, you would be responsible for any loss or damage to the Client's materials until the taking over certificate is issued.  It would be unusual for you to claim an extra payment for insuring the Client's materials.  I think that you will find that you are already covered under your Contractor's All Risks Policy or your third party liability policy.  I would contact my insurance provider and ask them.  

Next time check before you sign the contract.

---------- FOLLOW-UP ----------

QUESTION: This is lump sum project. The DI pipe only supply by client.
1.)Insurance the work
     Damage to persons and property
     Third party insurance
     Insurance against accident

only above items in BOQ. In tender stage we don't know the value of the Client supply DI pipes. How we decide the insurance rate for that. we price that items based on our tender summary figure only.
Other thing is the DI pipes not handover to us in one time.
But in the begging of the project start they are asking insurance for client's materials also.

When we are doing electrical transmission projects the client supply cables. then that cables insurance they put in BOQ as provisional sum and then the insurance will claiming accordance with handover-ed cable value.

but the case in water transmission project the insurance is not propositional sum and tender stage they didn't gave the DI pipes(client's material)value.

i'm asking in this case can we claim this additional premium charges from client for insurance their materials.

sir sorry earlier i put private due mistake. please can you answer the question.

Dear Chamara,

As it is a lump sum project, I doubt that you have any basis for a claim.  Have you asked your insurers if the goods are covered by their policy?  You can claim only for actual expenses.  If you have had similar projects with electrical transmission project, then you should have asked the question when you prepared your offer.  

I regret that I cannot give you a more sympathetic answer, but some times you have to take the loss and learn for the next project.  

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Peter M. Elliott


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 before submitting a question.


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.
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. . . John Ruskin (1819 - 1900)
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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
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Institution of Civil Engineers, Association of Chartered and Certified Accountants, Society of Construction Law, Dispute Resolution Board Foundation

B Sc(Hons) in Civil Engineering

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