Article
For the trust sector
Premises Risk: Hot Work Precautions
Are third party contractors undertaking “hot work” on premises held in a trust or
corporate structure? This can throw up additional concerns and implications for your
insurance cover.
From time to time properties are likely to have third
party contractors on site - rectifying damage or
undertaking maintenance or repairs, to name a few.
The following is a genuine example of what can go
wrong:A lack of internal procedures with regards to hot
work resulted in a £120,000 fire claim caused by a
contractor. The normal procedure is for the claim to
be paid under the Property Owners policy and then
for insurers to seek a recovery from the negligent
contractor’s Public Liability insurance.
As a result of the contractor breaching the terms of
their own insurance policy the contractor’s policy
did not respond to the claim, therefore there was no
recovery from the third party contractor’s Insurers and
in addition the third party contractor had insufficient
assets for the holding Insurers of the property to
consider suing them for recovery of damages in a
negligence claim.
In this case, the trust or company Property Owners’
insurance policy did respond to the claim and it has
now been settled. However, the payment made will
affect the owner’s loss record for many years (as the
insurers were unable to recover the payment made).
In addition, some Property Owners’ policies contain
heat application warranties (which set out the
conditions which any contractors must adhere to when
on site) which on this occasion would have invalidated
the claim.
Recommended Action
Step 1
Before the commencement of any hot work,
details of the contractor’s public liability insurance
must be obtained to ensure that it is adequate and
operative.
Step 2
Where the contractors are to undertake any form of
hot work in premises within a trust or company clients
premises, they must be made aware of the fire safety
procedures and ‘hot work’ permit system (this is a
basic Health and Safety requirement). Permit to work
systems are essentially formal, documented systems
of work. A written undertaking should be obtained
from the contractors before they start work, stating
that they will observe the precautions and work to the
‘hot work’ permit system.
Note: Hot work is any type of work involving the use of gas
or electric welding or cutting apparatus, blow lamps, blow
torches, grinding wheels and cutting discs or bitumen or tar
boilers.
We recommend that a written procedure should be
introduced to cover any hot work being undertaken
by contractors within buildings you own in trust or
corporate structures. This should be based on :- click
here (download RMG62).
The issue of a hot work permit is an effective way of
ensuring that the necessary precautions are taken.
Authority to issue a hot work permit or work
certificates should be strictly limited to named
personnel who have received the necessary training.
The list should be regularly reviewed, at least annually.
It is recommended that occasional audits on hot work
are carried out to ensure that the precautions detailed
on the permit are being observed.
Note: Assistance provided by Insurance Corporation of the
Channel Islands / Royal and Sun Alliance.
Vantage Insurance Brokers Limited, PO Box 420, No.4 The Forum, Grenville Street, St. Helier, Jersey JE4 0WQ
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Version: 2 (May 2015)