Do not forget insurance when the pressure of an adjudication bites

Adjudication is meant to provide a speedier and cheaper means of resolving construction disputes and to assist in keeping cash flowing during a construction project. It can work well in respect of easily quantifiable disputes – delay and disruption claims, extension of time claims or final account disputes. Its tight timescales can make it difficult to manage for more complex disputes which can be multi party, contain allegations of professional negligence or concern complex final account disputes.

A consultant or design and build contractor on the receiving end of an adjudication, may assume that their professional indemnity insurance provides cover for any sums awarded against them in an adjudication, as well as providing cover for their costs of defending any adjudication and, if required to pay them, the fees and expenses of the adjudicator. The deadline for notifying insurers of an adjudication is usually 2 working days or 48 hours from receipt of the Notice of Adjudication! Sadly, notification can be overlooked in the urgency of an adjudication until it is too late, and the insurance policy will exclude cover in those circumstances. The adjudication notice deadline can be found under the Exclusions or Claims Conditions sections of an insurance policy.

Written by Venetia Hanison