Frequently Asked Questions
The insurance table in clause 84.2 includes the minimum amount of insurance that the contractor has to take out. The contractor can, and often will, take out more – in this case the insurance minimum should be at least the build cost. It is important however to understand that the contractor remains liable, with or without insurance, subject to any limits in X18.
Also, the insurance company only has to pay out what the contractor is actually liable for because the insurance company is in effect standing in the contractor’s shoes. Therefore, if the contract limits the contractor’s liability to only half the construction cost, that is all the insurance company will have to pay even if the actual insurance cover is greater.
Before making any decisions, we would strongly recommend that you and your client get professional legal and insurance advice.