Fit Out and Refurbishment Contractor Insurance

Ask anybody who runs fit out projects where the claims come from and the answer is water, in a building full of other tenants.

A fit out disturbs pipework constantly: capping and altering heating and cooling, new tea point and washroom connections, sprinkler alterations, a drain connected into an existing stack, and a strip out that cuts into something nobody traced. A leak on the ninth floor reaches the eighth, seventh and sixth, which are somebody else's offices with somebody else's computers, files and ceilings. Overnight or over a weekend it runs unnoticed for hours. The physical repair is minor and the loss is several tenancies.

So the controls are isolation, testing and detection. Services traced and isolated with full identification rather than by apparent position, sprinkler alterations planned with the building's own contractor and tested, pressure tests before closing anything up and before leaving at the end of a shift, a known location for every isolating valve on the demise, and somebody in the building or contactable overnight where a system has been left charged. Tell the building manager what has been disturbed, because the person who can shut the riser at two in the morning is not on your team.

There is a loss specific to occupied buildings that is easy to cause and expensive out of proportion to its cause.

Dust from cutting, smoke from hot work, a disturbed detector, or a sprinkler head knocked during strip out sets off the building's fire detection. The building evacuates: every tenant, every floor, into the street, during trading hours. Nobody is hurt and nothing is damaged, and the cost is the lost trading time of every business in the building plus the fire service's attendance, which in some areas is chargeable for repeat events. The landlord's patience is the other casualty, and on a multi let building that affects whether you work there again.

So detection management is part of the method rather than an afterthought. Detector isolation agreed with the building management and recorded before dusty or hot work, local isolation of the affected zone only rather than the system, reinstatement of detection checked at the end of every shift, dust suppression and screening at source, and hot works permits that the building issues rather than ones you write. A fit out contractor who has a documented arrangement with building management on detection is managing the loss most likely to make them unwelcome.

Fit out happens inside somebody else's asset under permission, and that permission has terms that bind the contractor as much as the tenant.

A licence to alter sets out what may be changed, how the building may be used during the works, working hours, noise limits, delivery and lift access arrangements, protection requirements to common parts, insurance requirements, and the condition in which things must be left. Breaching it is a contractual matter between tenant and landlord that lands on the contractor, and the recurring breaches are mundane: working outside permitted hours, using the passenger lift, deliveries through the main entrance, damage to common parts, and alterations beyond what was licensed.

So read it rather than relying on the client's summary. Get the licence and the building's own contractor rules at the start, protect common parts before the first delivery and photograph them, use the routes and hours specified even when it is inconvenient, and raise anything the programme requires that the licence does not permit before doing it. Damage to a lift car or a marble floor in a prestige building is a very expensive repair and an immediate reputational problem with a landlord who commissions a lot of work.

Refurbishment is the activity most likely to disturb asbestos, and fit out contractors do more strip out than anybody.

A pre-2000 commercial building can contain asbestos in ceiling tiles, pipe and duct lagging, textured coatings, floor tiles and their adhesive, cement panels, riser linings, fire breaks above ceilings and electrical backing boards. Strip out opens all of those places, frequently at pace, frequently at night, and frequently in a building whose asbestos register is out of date or describes a survey that was management rather than refurbishment and demolition standard. A disturbance contaminates a demise and sometimes a riser serving other floors.

So the survey standard is the control and it is a stop rather than a formality. Insist on a refurbishment and demolition survey covering the actual areas being stripped rather than a management survey or a register, refuse to start without it, brief every operative that unidentified material above a ceiling is a stop, and have a written procedure for an unexpected discovery. Most policies exclude asbestos liability entirely, so a disturbance is not a claim you can make: it is a cost, a programme failure and a notifiable incident.

Water into other tenancies is the claim. We are an FCA regulated broker and will not tell you we are the best choice. These are the questions that decide it.