QS vets draft insurances and bonds submitted by the Contractors and Nominated Sub-Contractors and Suppliers to ensure that the terms and conditions are in compliance with the contract requirements.
Usual types:
Contractors' all risks and third party liability insurances – required to be submitted before any work on site
Employees’ Compensation Insurance – required to be submitted before any work on site
Surety bond – usually required before the first payment otherwise cash security of equal amount will be retained
Materials and workmanship warranty (roofing, kitchen and bathroom waterproofing layers, windows, curtain wall) – usually towards Substantial / Practical Completion.
Form of Warranty related to Nominated Sub-Contractors and Suppliers should have been dealt with not later than the award of the contracts.
Usual problems encountered:
Drafts not exactly following the pro-forma given in the Tender Documents (pro-forma usually given for bonds and warranties)
Drafts not complying with contract requirements
Incorrect date of the letter of acceptance or letter of intent inserted (used when Contract Documents may not have been signed at that time)
Incorrect names and addresses of Project, Employer and Contractor inserted
Incorrect descriptions of parties to be included as the joint-insured
Incorrect descriptions to cover all tiers of sub-contractors
Amounts of excesses too high
Period of insurance (construction and defects liability / maintenance) not sufficient
Fixed expiry date in the form of calendar date instead of a floating expiry date pegged to the Substantial Completion Date or Date of Defects Rectification Certificate / Certificate of Completion of Making Good Defects.
Late submission of drafts with protracted rounds of comments and re-submissions