Insurance Against Party Wall Works

Provision of adequate insurance against risks attributable to the building owner or contractor was once a common requirement in party wall awards, but usually only relating to inexpensive Public Liability insurance. 

RICS Guidance

For some reason, the above provision was retained in the recently published 5th edition of the RICS Guidance Note on party wall procedures, section 6.1.17. This clause was however intentionally deleted from the 6th edition and later editions by consensus of the panels that prepared them which presumably decided that it is not a matter which surveyors have authority on. 

Authority under the Party Wall Act

Many would cite s10(12)(c) of the Act that an award may “determine any matter arising out of or incidental to a dispute under this Act (including any matter relating to costs).” It may be theoretically possible to impose such a requirement in an award.

One could argue that party wall surveyors are experts in damages arising out of unauthorised or unlawful works but not insurance matters specifically and should not necessarily be reviewing insurance policies.

Insured Persons

Another complication may be considered in that the adjoining owner is not named as an insured person under the building owner’s contractor’s public liability insurance policy, so they can not benefit from claims made under it. 

Having such a policy does not keep damage from happening or speed up repairs. If there are works planned but they are abandoned before completion or completed without repairing the damage caused, then requiring proof of the policy and payout will not necessarily result in repair.

Security for Expenses

However, a suggestion that seems to be completely workable is requiring security for expenses payable on demand. This would enable the adjoining owner to access available funds (if necessary) to cover the cost of their own repairs and/or any award-authorised repairs that were not made by the building owner if they are abandoned or damaged, but without tying up a large sum of money from which the building owner might need flexibility. 

Before an adjoining owner can claim a payment under it, they must prove that they have a party wall award and that the appeal period has passed.