Note
- 5/4/2022: Split from Post Contract.
- 3/4/2020: Created.
Generally
Vet insurances, bonds and warranties
- 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
- Late submission of formally executed documents.