Party wall damage: who pays, and where insurance fits
Key Takeaways
- Where party wall works damage a neighbouring property, the building owner is expected to make it good or pay for it.
- A schedule of condition recorded before the works start is important evidence, and several insurers require one.
- A contractor’s public liability policy responds only where negligence is established; vibration, settlement and removal of support can cause damage when no one is at fault.
- Non-negligent liability cover, often specified as JCT 6.5.1 cover, stands behind the building owner’s obligation when no one is to blame.
The building work is next door, but the crack is in your wall. Or you are the one doing the building, and the neighbour’s surveyor has just sent photographs. Party wall damage is one of the most common flashpoints in domestic and small commercial construction, and the question everyone asks is: who is responsible for paying for such damage? This article sets out the position for both sides of the wall, and where insurance does and does not help. The legal points below are general principles rather than advice on any particular dispute.
The starting point: the building owner makes it good
Where works of the kind covered by the Party Wall etc. Act 1996 damage the adjoining owner’s property, the expectation built into the process is that the building owner, the one doing the works, puts it right or pays for it. The party wall award, made by the appointed surveyor or surveyors, typically records the condition of the neighbouring property before works start, in what is known as a schedule of condition, so that damage can be identified and attributed afterwards. Several insurers in fact mandate that a schedule of condition is carried out before the works begin, so it is clear what damage, if any, has been caused as a result of the works.
If you are the adjoining owner
Your own buildings insurance is not really designed for this situation. It may respond to some kinds of damage, but insurers take the reasonable view that the person who caused damage should fund it, so a claim on your own policy tends to become your insurer pursuing the neighbour anyway, with your excess and your claims record in the middle. The more direct route is the one the party wall process anticipates: damage recorded against the schedule of condition, made good or paid for by the building owner. The practical steps are: photograph everything before works start, cooperate with the schedule of condition, report damage promptly and in writing, and ask the building owner to confirm the insurance is in place for the works. For substantial works such as basement excavation, an adjoining owner can also ask whether non-negligent liability cover is in place, because that is the policy designed for damage nobody is at fault for.
If you are the building owner
There are two key policies, which cover different failures. Your contractor’s public liability insurance responds where the contractor has been negligent: the badly propped excavation, the misread drawing. But vibration, settlement, heave and removal of support can damage a neighbouring building when the work has been done with entire competence, and a liability policy has nothing to attach to without fault. That is the gap non-negligent liability cover, often specified in building contracts as JCT 6.5.1 cover, exists to fill: it stands behind your obligation to the neighbour when no one is to blame. Whether you need it depends on the works. Redecoration does not move buildings; excavation, underpinning and demolition do. A well set-up project near a party wall usually carries notices properly served, a schedule of condition, a contractor with appropriate public liability insurance, and non-negligent cover where the works justify it.
Where it goes wrong, and how to keep out of it
Most party wall insurance disputes are really evidence disputes: no schedule of condition, so every crack becomes an argument about whether it was there before. The rest are structural: the building owner assumed the contractor’s insurance covered everything, discovered the negligence requirement too late, and is now funding repairs personally while the project stalls. We arrange non-negligent liability cover for building owners and contractors, on individual projects and as extensions to annual programmes, and our non-negligent liability page explains the cover in full. If your project involves digging near a shared wall, it is a conversation to have before the machines arrive.
