Can security for expenses be provided by an insurance policy?

Contractor’s insurances, householder’s third-party liability and renovation insurance policies do provide some security but most insurance policies of this kind offer protection against negligence and problems can arise if the contractor has not been negligent. Special “non-negligent” insurance policies have been known to refuse to pay out because the damage was foreseeable.

In practice, insurance claims usually take time and do not always cover all the costs of the claimant. For these reasons, surveyors are increasingly reluctant to accept insurance policies as providing an acceptable form of security.

Specific security for expenses insurance is available for security under the Party Wall etc. Act. This is controversial among surveyors as it undermines the surveyors’ statutory authority to deal with any dispute that arises. As with any insurance policy, a loss adjuster will be appointed to investigate any claim and the policy seeks to give insurers the right to refer to the Third Surveyor to act as mediator.