Guide to Using the RIBA Professional Services Contracts 2018 - Other - Page 65
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Guide to RIBA Professional Services Contracts 2018
However, for a project where the budget was tens of millions of pounds, it would not
be unusual to agree with the Client cover of, say, £5 million per claim. It is probably
wise to draw the Client’s attention to the amount of insurance cover ‘available for the
Project’, particularly where the Client may be seen as having less bargaining power
than the Architect/Consultant.
Although not stated, the limit of liability cannot exclude loss or damage arising from
death, personal injury or misrepresentation. It is not necessary to refer to such liability
or its exclusion as the Unfair Contract Terms Act 1977 would prevent its use as an
effective defence.
To ensure that the Agreement accurately reflects the policy terms, it may be
advisable to discuss with the insurers/broker the terms of the policy, in relation to:
• net contribution or an aggregate liability for all claims
• any aggregate cap for pollution and contamination or asbestos and toxic mould
claims
• terrorism
• Sub-consultants.
The RIBA Insurance Agency (www.architectspi.com) publishes a Guide to
Understanding Risk Management.
The Client must be informed if the insurer excludes cover for claims related to any
aspect of the project, e.g. asbestos or terrorism, or at a subsequent renewal of the
insurance, the premiums are unreasonable in relation to the Architect/Consultant’s
business so that the Architect/Consultant and Client can discuss their options.
Key watchpoints
• Maintain your professional indemnity insurance at least until the end of your
period of liability for the works.
• Always check the policy wording and know what you are liable, and NOT liable,
for.
• Be sure of your liabilities for pollution, contamination and asbestos.
• Check whether terms are for ‘each and every’ claim or aggregate.
• Check the amount of your excess and what it covers.
• The amount of cover must be fair and reasonable and proportionate to the risk
and size of project.
• On consumer projects discuss the terms with the Client.
4.11 Suspension or termination of the Project and/or Contract
Once a commission or contract is under way, there may be good reason why it is
necessary for the project to be suspended or even terminated. This section looks at
the options for the Client and the Architect/Consultant when considering such matters.
Suspension and termination clauses in Contracts give parties the right to suspend
or terminate in certain circumstances. These most commonly deal with breaches of
specified contractual obligations although there may be rights to terminate in other
situations too, such as the occurrence of a force majeure event.
There is a very close relationship between suspension and termination. The end
result of the suspension clauses is much the same as the termination clause in
that either party has the right to terminate the Contract at the end of the agreed
suspension period. Sometimes suspension can be used by one party to allow it
space to consider how to proceed with a project, which should be acceptable to
the other party if kept within reasonable limits. The Client may incur a change of
circumstances that makes continuing with the works difficult in the short term.
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