Why should I consider Delay Costs Cover in addition to a Rights of Light policy?
You may get to a point where you have to stop work on site due to a Rights of Light issue. This is usually triggered as a result of being served with an interim injunction. If an injured party comes forward and they are covered under a Rights of Light insurance policy, the insurers may elect and instruct you to down tools in order not to prejudice their position if the matter ever goes to court. By taking out delay costs cover it is possible to protect your interests and guard against potential losses as a result of a Delay Event.
What is a Delay Event?
An event (including but not limited to a temporary or final injunction) occurring solely by the reason of the insured risk which prevents the client from carrying out their works. In addition there may be an agreement between the client and the insurer that works should be suspended.
What is generally covered in a delay costs policy?
Loan payments: additional interest payable to a bank or other financial institution in relation to a loan made or facility granted solely for the purpose of the works as a consequence of a Delay Event
Redeployment of Staff and Plant: additional expenditure necessarily and reasonably incurred by the client for the sole purpose of permitting staff, plant or other equipment to be utilised at another location during a period of interruption
Contractual payments: for depreciation and other standing charges (including but not limited to contractual payments due in relation to leases) incurred on account of plant and equipment acquired solely and necessarily for the purpose of the works which cannot be utilised elsewhere during a period of Interruption
Payroll: wages, salaries and other costs of staff engaged solely and necessarily for the purpose of the Works which the Insured is bound to pay by contract or statute during or as a consequence of a Period of Interruption
Contractual Penalties: sums contractually due (whether as penalties or otherwise) to third parties as a consequence of a Delay Event.
How much does it cost?
Delay costs cover typically costs between £7500.00-£10,000.00 Plus IPT per £1,000,000.00 of cover, but this will vary between different providers.
What is IPT?
Insurance Premium Tax (IPT) is payable on all insurance policies issued. Insurance premiums quoted will include IPT at the current rate chargeable in England and Wales unless otherwise stated.