When is this actually required?
We are often asked to provide party wall insurance in respect of structures which are not actually attached, or even proximate to third party property. It’s a reasonable request because a good quality party wall policy does actually extend to cover areas of the existing structure not being worked on in exactly the same way as it would cover a third party property.
If your client is insuring the structure with a standard property insurer, then our advice to a renovator undertaking significant structural works would be that such a policy would have some value. The simple truth is that most, if not all standard property insurers will exclude damage to the existing structure caused by the contractor whether this was as a result of negligence or not. A party wall policy would therefore step in where areas of the structure not being worked on were damaged as a result of the works, but not as a result of negligence.
However, under our JCT compliant, All Risks works package, we provide direct cover for accidental damage to the structure being worked on caused by the contractor whether this is the result of negligence or not. In effect, we directly cover that extension to a good quality party wall policy under our own package. As a result, if we are of the view that there is no third party property at risk, we will advise that there is no need to include party wall insurance to cover off this risk, providing as we do, this cover directly.
I’d make one final point here. Your clients should be aware that there needn’t be a physical party wall for your client to have a liability under the Party Wall Act, and for party wall insurance to be a sensible option. If the works are occurring within a certain distance from neighbouring structures, even if they are detached, party wall notices may still need to be served, and the risk of structural damage to neighbouring property can still exist. Where there is risk of damage to third party structures stemming from the works, and even if no liability exists under the Act, your client can still benefit from the peace of mind such a policy provides. We’ll provide you with all the advice you need and build this cover into our offering when it’s required.
Contact our team of expert underwriters for more information, or to discuss specific risks.