Aon shine a light on Joint Names insurance option

Aon have submitted this item on Joint Names insurance, which may be of specific use to members at academies and trusts.

At Aon, we understand that you’re continually looking to improve your school environment and that from time to time, you’ll engage contractors to undertake either renovation or new build work on school property. This work comes with its own unique risks and specific insurance requirements, and whenever you have work done, you should carefully consider whether your existing insurance arrangements give you the protection you need should something go wrong.

For Academy Trusts that are members of the Department of Education Risk Protection Arrangement (RPA), some cover for improvement works is already in place. The RPA covers existing buildings and their contents during the works, and also provides up to £250,000 worth of cover for damage to works in progress. The RPA cover only applies to alteration or refurbishment work to existing property, however, any new building works are not protected. In addition, RPA cover does not necessarily cover damage to existing property where losses are due to the negligence of the contractor, and whilst you would expect a contractor’s third party liability coverage to step in under these circumstances, the academy is entirely reliant on the contractor having arranged adequate cover. RPA cover also can’t be varied to reflect any specific contractual terms that may be contained within the contract with a contractor. As such, whilst the RPA provides protection in certain circumstances, academies may wish to consider arranging more extensive protection if:

● The works in progress are worth more than £250,000

● The works are a new build project

● Specific contractual terms need to be reflected in any insurance arrangements, such as joint names.

The alternative - Joint Names Insurance

Where academies feel that the protection provided by the RPA is insufficient to cover their needs, there is an alternative - separate ‘Joint Names’ cover can be arranged for contract works that is taken out jointly in the names of the academy and the contractor to bridge the gaps in RPA protection. As well as giving greater flexibility to the academy by providing cover for new builds and for limits above the £250,000 provided by the RPA, arranging Joint Names cover provides the following benefits:

No dual insurance

Taking out a Joint Names policy avoids both the academy and the contractor taking out separate policies to cover the contract works, which may be less economical and could lead to the same risk being covered under both policies - a scenario which causes complications in the event that there’s a claim.

Avoids costly litigation

Having a Joint Names policy avoids the situation where an incident occurs and each party claims against the other, incurring significant legal costs on all sides - instead, the claim would be handled under the single Joint Names policy.

Protection from cancellation

Whilst all prudent academies check that the contractors they employ hold the necessary third party liability insurance at the outset of a project, very few have the time to periodically check that this insurance remains in force during the work - if the contractor has cancelled or defaulted on their third party liability insurance, the academy could still be left exposed. Joint Names insurance cannot be cancelled without the consent of both parties, giving academies the additional peace of mind that they remain protected.

Claims payable direct

Any claims made under a contractor’s ‘Contractors All Risks’ insurance would ultimately be payable to them, even where the claim results from damage to academy property - in circumstances where the contractor may have become insolvent between the claim occurring and settlement being agreed, or where the relationship has broken down with a contractor, this could result in the academy being left out of pocket even where claims are paid out. Under Joint Names cover, the academy has the right to make a claim and receive claims settlement direct from the insurer, protecting against such circumstances.

To find out more

Cover cannot be back dated so to ensure you have appropriate cover in place, remember to get in touch with us ahead of the contract start date.

Contact details:

+44 (0)7825 846 577 - Sham Notay, Client Director

+44 (0)7809 284 290 - Jonathan Rodger, Senior Client Manager

+44 (0)1924 666 850 - Lisa Hewson, Client Manager

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