Your questions answered on PIB’s Security for Expenses insurance solution

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PIB Insurance Brokers launched its brand new and unique Security for Expenses insurance solution earlier this year for property owners and developers. Since then, we’ve had a few questions about the solution and how it works, so we’ve put together some handy FAQs to help you decide if this is the right solution for you. The FAQs cover topics around why the solution is unique, how it helps property owners through to length of a policy and how to obtain a quotation. 

What does Security for Expenses insurance do?

The insurance policy provides an alternative to escrow when Security for Expenses is requested by an adjoining owner under Section 12 of the Party Wall etc. Act 1996.

Who does it protect?

The policy protects the adjoining owner only.

What is the difference between Security for Expenses insurance and Party Wall/Non-Negligence insurance?

Party Wall insurance or Non-Negligence insurance as it is also known, is often connected to a J.C.T. contract and protects the building owner against legal liability claims and losses arising from non-negligent injury, as well as damage to the adjoining owner’s property. Security for Expenses is different, in that it provides protection to an adjoining owner, replacing the need for physical security to be held in escrow or by other methods.

Why is Security for Expenses insurance unique?

This is the only policy available that protects an adjoining owner directly and therefore will not fall away if a building owner becomes insolvent or abandons any commenced works to the party wall.

Does it replace other insurances?

No, this is a standalone policy and does not replace any of the construction and/or buildings insurances that we would expect to be in force for a construction project. If you require any construction insurance, including Party Wall/non-negligence cover, please contact PIB Insurance Brokers Construction Director, Mike Carolan – email:

Is it compulsory to have non-negligence cover before taking Security for Expenses insurance?

Non-negligence insurance is not compulsory however, as the Security for Expenses insurer will look to recover their costs after a claim is settled, we would recommend that it is taken out to protect the building owner.

How does it help the building owners?

It replaces the need to place security (funds) in escrow or by other methods, and therefore increases their cashflow for the project building works.

What happens if I change my surveyor?

The policy allows for a change of surveyor in the policy schedule subject to the insurers minimum requirements for a surveyor.

Who pays for the policy?

The policy is paid for by the building owner

When will it pay out?

If an award has been made under section 10 (10) or section 10 (11) of the Party Wall etc Act 1996 in connection with the works to the party wall; and provided that 14 days have passed since the award was served on the building owner; and this has not been appealed or an appeal has been lodged but not been upheld; payment will be made to the adjoining owner within 28 days.

When an award is made for security to be released to deal with damage, will the insurer always subrogate against the building owner’s insurance policies?

If the award is made for damages and the claim could have been made against an alternative insurance policy, the Insurer has full subrogation rights against the alternative insurance cover in place.

When damage is expected, i.e. the state of the Party Wall makes it highly likely that works will cause damage, how will this be underwritten and then managed within the policy?

These situations will be underwritten on a case by case basis and insurers have the right to increase the terms of the policy where they see fit. In some instances, insurers may deem the risk too high and cover may not be available.

Can I take out a policy if there is an Appointed Surveyor?

Perhaps, if cover is only required for the abandonment of any works to the party wall (i.e. not for damage) and this is confirmed in the party wall award. Then these cases will be underwritten on a case by case basis, but again, cover may not always be available.

How long is the policy valid?

The policy is valid until 12 months after the works to the party wall have been completed and the appropriate “sign-off” has been granted.

What information do I need to provide to obtain a quotation?

To obtain a quotation for Security for Expenses insurance, you will need the following in place before a quote can be given;

  1. A completed proposal form, which is available from our website here.
  2. The full or current draft Party Wall Agreement.
  3. The signed Schedule of Conditions.
  4. Confirmation that neither the Building Owner or the Main Contractor has been involved in any abandoned works relating to any Party Wall Agreement in the past 5 Years
  5. Confirmation that the Building Owner and the Contractors have appropriate construction insurances in place for the proposed Works detailed in the Party Wall Agreement.
  6. Confirmation that the construction materials and methodology is classed as standard within the UK building industry.

To find out more about Security for Expenses insurance or to speak to our team about obtaining a quote call our team on 0330 058 9670 or email