JCT Intermediate Building Contract 2011 - what's new?

Terrorism cover

The major change to be introduced in the 2011 editions is in respect of Terrorism cover. The parties are now required to specify the level of terrorism cover that they require (clause 6.10). This is intended to reflect the fact that such insurance may be difficult to obtain and will incur a further premium for which the parties will need to cater. Unless otherwise stated the contract particulars will require Pool re cover as a default.

In works for the construction of a new building where the parties agree that the contractor will take out insurance (i.e. Insurance Option A in the IBC is selected) the cost of insurance effected through Pool Re will be included, or will be deemed included, in the contract sum. A premium relating to a policy effected with another insurer will be added to the contract sum.

The cessation or withdrawal of terrorism insurance by the joint names insurer entitles the employer to terminate the contractor’s employment (clause 6.11.2).

Acts of terrorism not within the cover agreed under the contract become an excepted risk (clause 6.8).

Contract’s Professional Indemnity Insurance (IBC/CD only)

The IBC/CD (but not the IBC) makes one further noteworthy change. The contractor’s obligation to effect professional indemnity insurance in relation to the contractor’s Designed Portion will no longer require him to cover against losses relating to asbestos or fungal mould claims. Therefore, should these be required, the parties will need to address the risks specifically in the contract particulars (see Contract particulars, clause 6.16).