Construction Insurance and UK Construction Contracts
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CHAPTER 20
Contract insurance under JCT Major Project Construction Contract 2011
General
20.1 The Major Project Form (MP) was introduced by the Joint Contracts Tribunal in June 2003 and represented a sea change in approach from the standard form contracts that had gone before. As with the other JCT families, this contract was updated in 2005 (MP05) and again in 2011 (MP11), which is the version that this chapter addresses. MP11 is aimed at employers who have their own in-house contractual procedures and at the contractors with whom they work. In other words, this contract is to be used by experienced employers and contractors who are used to executing major projects and who understand the commercial and practical risks inherent in such developments. As a result, the MP11 provides a framework within which the parties define their obligations, as opposed to the historic approach of parties heavily amending one of the other standard form contracts. 20.2 Recognising that large and complex projects often require bespoke insurance arrangements, MP11 does not attempt to define the scope or terms of the insurances that are to be provided. Their role is limited to ensuring that the insurances remain in force for the benefit of the project and that the parties comply with the terms. To this end, MP11 makes provision for certain indemnities between the parties (clause 32) and by clause 33 makes provision for the parties to record their bespoke insurance obligations in the contract particulars. Clause 34, which has to be specifically incorporated, addresses professional indemnity insurance. 20.3 The guidance that accompanies MP11 expressly states that the employer should consult insurance advisers prior to the issue of tender documents, with insurance representatives of both parties jointly reviewing the insurance provisions before the contract is executed. 20.4 Finally, it should be noted that there have been no reported cases, at the time of writing, specifically dealing with either MP05 or MP11.Relevant provisions in the contract
20.5 In summary, the provisions in MP11 relevant to insurance are as follows:- Clause 32.1: the contractor is to indemnify the employer against claims in respect of personal injury to or the death of any person, and against loss, injury or damage to property arising out of the project, except to the extent that the employer or any person for whom the employer is responsible is at fault.
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Clause 32.2: this mirrors clause 32.1, and provides for the employer to indemnify the contractor in respect of the same matters where the employer or any person for whom the employer is responsible is at fault.Page 282
- Clause 33.1: requires the parties to provide and maintain the policies of insurance recorded in the contract particulars, and where applicable to comply with the Joint Fire Code. The remainder of this clause deals with the operation of the policies set out in the contract particulars.
- Clause 34: provides that the contractor shall take out and maintain professional indemnity insurance until the expiry of 12 years from practical completion. This clause only applies when stated in the contract particulars.
Specific provisions
Indemnities
32.1 The Contractor shall be liable for and shall indemnify the Employer against any expense, liability, loss, claim or proceedings arising under statute or at common law in respect of: