Understanding JCT 6.5.1 Non-negligent Liability

Non-negligent liability, also known as JCT insurance can be complicated, so we’ve tried to put it in simple terms.

About the Party Wall Act 1996

JCT 6.5.1 Non-Negligent Liability is often referred to as JCT 21.2.1 Insurance, Party Wall insurance or JCT Liability. This is a form of cover which came into effect following the Party Wall Act 1996. The Act makes homeowners in England and Wales responsible for damage caused to a neighbouring property as a result of a building project.

In summary, the Act provides a framework for preventing and resolving a dispute in relation to party walls, boundary walls and excavations near neighbouring buildings. Under the Act, anyone planning to carry out work of this type must give adjoining owners notice of their intentions.

The act covers the following types of works:

• New building on or at the boundary of two properties
• Work to an existing party wall or structure
• Excavation near to and/or below the foundation level of neighbouring properties.

What is Non-Negligent Insurance?

Typically, Non-negligent insurance gives homeowners protection against damage to third party property. Some stand-alone polices may even extend to cover the existing structure. This type of cover is needed when negligence, usually against your contractor, cannot be clearly established. A standard Public Liability Insurance policy will only indemnify the insured party (usually the contractor) against damage to third party property or persons which has resulted from their negligence. But what if the works cause damage to a neighbouring property and the contractor was not negligent?  This potentially leaves the property owner facing a substantial monetary claim without the protection of an insurance policy.

Why is it called JCT Insurance?

JCT standards for Joint Contracts Tribunal. This type of contract is often drawn up for specific, one-off building projects. There are a number of different types and versions but typically, the Contract will ask if this cover is required under Section 6.5.1 (formally known as Section 21.2.1).

Cover can be obtained by either the property owner or the main contractor. It is often stipulated within the contract that cover must be insured in Joint Names between the property owner and the Contractor.

What is the insurance actually covering?

This cover is usually treated as an extension to the property owners Public Liability policy unless the insured has taken out a stand-alone policy. Public Liability insurance requires a negligent act to have caused the damage. However this cover extends to include damage caused where there are no negligent acts. i.e major groundworks resulting in cracking to a neighbouring property.

The types of perils covered include: subsidence, heave, collapse, vibrations or weakening/removal of support or the lowering of ground water consequent upon carrying out the contract works.

It is important that when assessing the indemnity limit for your Party Wall insurance that you consider the value of the properties around you. Usually, the limit of indemnity provided starts at £1,000,000.

If you are working on a project and think you need JCT insurance we can help with our specialist policy. You can get a quote by clicking here.