What’s the Point of Joint Names Insurance? (and why you probably need it)

It is one of those lines in the contract most people gloss over. "Joint names insurance to be arranged by the Employer..." Or "Option B selected..." And then everyone moves on.

But here is the reality: if something goes wrong on site, and the joint names insurance has not been arranged properly, your project is wide open to delay, legal argument, and financial loss.

As contract administrators, QSs, and PMs, we are not the ones taking out the policy. But we are very often the only ones who know enough to check whether it is right, missing, or simply misunderstood.

What is joint names insurance?

It is a single policy that names both the employer and the contractor as insured parties. It applies to physical damage to the works: fire, flood, vandalism, storm, theft, and ensures that if anything goes wrong:

• The insurer pays out
• The works can be reinstated
• No one has to argue about fault

This is not about contractor negligence. It is about ensuring the project can recover from unexpected damage without litigation between the parties.

What are the options in the JCT 2024 ICD contract?

Depending on the contract, you will find the requirements in Clause 6.7 and Schedule 3. The options are:

• Option A: Employer arranges joint names insurance for the works (most common on new builds)
• Option B: Contractor arranges joint names insurance for the works (often used on smaller jobs or where the contractor’s broker can provide better terms)
• Option C: For work on existing structures: Employer insures the existing building, contractor insures the works

Each option comes with its own implications. They are not interchangeable and you need to make sure the contract reflects the right choice, and that the policy exists in practice.

What is often misunderstood?

1. The contract says joint names insurance is required — but no one arranges it We regularly find projects where the insurance clause is filled in, but the policy does not exist, or it is not joint names
2. Homeowner clients assume their standard building insurance will cover the works It usually does not. In fact, starting major works without telling their insurer often invalidates the policy
3. The contractor has insurance, but the employer is not named If the works are damaged, the employer cannot claim. That defeats the point of joint names
4. Refurbishment jobs using Option C do not check if the existing structure is insured for works risks This is a major gap. Most homeowner insurance policies exclude damage caused during building work

Whose job is it to inform the client?

Under the JCT ICD 2024, the contract makes clear that the party responsible for arranging the insurance (whether employer or contractor) must provide evidence that it is in place.

But the responsibility to explain and confirm the requirement almost always falls on the contract administrator or project manager.

Clients rarely understand the difference between public liability, contract works insurance, and joint names cover. It is our job to flag this at pre-contract stage and ensure that the right party takes action.

If you are leading the tender process or compiling the contract documents, and you do not raise this, no one else will.

What should we be doing?

Here is what we now treat as standard:

• Confirm the correct option is selected in the contract
• Check who is responsible for arranging the policy
• Request a copy of the insurance certificate and schedule
• Ensure both the employer and contractor are named
• Confirm the policy covers the full reinstatement value of the works
• Review the exclusions and excesses (especially for subsidence, flood, and terrorism)
• Log this as a pre-start check, and do not issue the first interim certificate until it is resolved

Why does this matter so much?

Because when something goes wrong: fire, flood, collapse... you want the insurer to respond immediately.

You do not want to:

• Investigate whose fault it was
• Wait months for insurers to decide who is liable
• Deal with a site shutdown while it gets resolved
• Explain to the client why they are not covered

Joint names insurance is how you avoid that. It allows the project to restart with the minimum disruption, regardless of fault.

So...

If you are acting under a JCT contract and are not confirming the joint names insurance details before site start, you are relying on luck.

This is not legal overkill or belt-and-braces contracting. It is the one clause in the JCT that actively prevents disputes rather than managing them.

You will never regret having it in place. But you will very much regret assuming it was “probably sorted.”