HOME BUILDING ACT 1989 - SECT 99
Requirements for insurance for residential building work done under contract
HOME BUILDING ACT 1989 - SECT 99
Requirements for insurance for residential building work done under contract
99 Requirements for insurance for residential building work done under
contract
(1) A contract of insurance in relation to residential building work required
by section 92 must insure--
(a) a person on whose behalf the work is being
done against the risk of loss resulting from non-completion of the work
because of the insolvency, death or disappearance of the contractor, and
(b)
a person on whose behalf the work is being done and the person's successors in
title against the risk of being unable, because of the insolvency, death or
disappearance of the contractor--
(i) to have the contractor rectify a breach
of a statutory warranty in respect of the work, or
(ii) to recover
compensation from the contractor for any such breach.
(2) Subsection (1) does
not require the following to be insured--
(a) a developer on whose behalf
residential building work is being done,
(b) any other person belonging to a
class of persons prescribed by the regulations for the purposes of this
section.
(2A) A provision of a contract of insurance providing cover for the
benefit of a person on whose behalf work is done on land is to be read as
providing (and to have always provided) for the same benefit in relation to a
non-contracting owner of the land.
(2B) Subsection (2A) applies irrespective
of whether or not the contract of insurance concerned contains a term to the
same effect as that subsection.
(3) If a partnership contracts to do
residential building work, the insolvency of any of the partners constitutes
the insolvency of the contractor for the purposes of a contract of insurance
required by section 92 in relation to the work. The contract of insurance must
include provision to that effect.
(4) Despite any other provision of this
section, a contract of insurance in relation to residential building work
required by section 92 may consist of 2 separate contracts of insurance if--
(a) one contract (a
"construction period insurance contract" ) insures against--
(i) the risk
specified in subsection (1)(a), and
(ii) the risk specified in subsection
(1)(b) in a case of non-completion of the residential building work, and
(b)
the other contract (a
"warranty period insurance contract" ) insures against the risk specified in
subsection (1)(b).
(5) A warranty period insurance contract is not required
to, but may, cover loss that arises from a breach of a statutory warranty in a
case of non-completion of residential building work.