The Health and Safety Executive (HSE) defines hot works as: “any process that generates flames, sparks or heat”. Common examples of hot works include: welding, cutting, grinding, sawing, the application of heat to free rusted on bolts and using a blowtorch (for example to fit flat roofing), the execution of which, if not done properly, can result in fires.
It is no surprise, therefore, that insurers often include conditions in their policies specifically relating to the application of/use of heat (often as a warranty contained in a standalone endorsement), and refuse to indemnify policyholders where the hot works provisions have not been fully complied with. That is, on the face of it, harsh; if you’ve obtained cover for the use of hot works it is fair to assume that you would be insured if a fire was caused during the application of heat. The problem with such provisions is that they are often misunderstood or, worse still, the insured doesn’t even know it’s there.
This update considers hot work provisions in more detail and sets out what you should consider before, during and after the execution of hot works.
Hot works provisions
Hot works provisions in insurance policies set out the basic precautions you should take to minimise the risk of an accidental fire starting or, where a fire has started, the risk of that fire getting out of hand. They are usually found in two types of insurance policies:
- Building owners policy
The hot works provision may, for example, specify that a hot works permit is required before the commencement of hot works and that a copy of the permit be retained for a set period of time. It may, of course, be even more specific.
- Contractors policy
Any construction contractor using the application of heat to carry out their work is likely to have a hot works provision within their liability insurance. It might be buried within the thick policy wording or as an endorsement.
The hot works provision may, for example, specify that all combustible material in the vicinity of the work be removed, that fire extinguishers are available (the type of which is often specified), for use at the point of work or as near as is practicable and that hot air guns, welders and strippers are to be switched off when unattended. You might also have to keep compliance records.
Hot works provisions may also include more onerous requirements. It is not unusual, for example, for a hot works provision to require that a firewatcher be appointed, remain onsite until all flames have been extinguished and return to the site after 30 minutes and then again 60 minutes (or some other time stipulation), after the use of such equipment in order to ensure that a fire has not started and gone unnoticed in the meantime.
What if I don’t comply with a hot works provision?
Compliance with a hot works provision is usually a condition precedent to liability and the failure to comply is also often a breach of warranty entitling an insurer to decline to pay any claim for that particular incident. Section 11 of the Insurance Act 2015 (which, in broad terms, seeks to prevent insurers declining claims where non-compliance with the term could not have increased the risk of the loss which actually occurred in the circumstances in which it occurred), will be of no help to an insured seeking to rely on their policy, because breach will almost certainly be causative of the loss.
It is, therefore, of paramount importance to comply with any hot works provisions in your insurance policy as failure to do so may entitle the insurer to reject your claim and refuse to pay out.
A hot works clause was considered most recently by the Commercial Court in Aspen Insurance UK Ltd & Liberty Mutual Insurance Europe Ltd v Sangster and Annand .
The Commercial Court rejected the hotel’s argument that recklessness was required in order to establish a breach of the hot works condition and held that previous decisions on recklessness were all concerned with general reasonable precautions clauses. The hot works clause, on the contrary, was a “highly defined and circumscribed set of particular safeguards which have to put in place, drawn from industry guidance.” The court also rejected the hotel’s argument that there had to be any causal connection between any breach of the clause and the fire.
Where a policy contains specific obligations, the recklessness threshold does not apply.
Contractors need to be aware of the requirements of their cover and, if using hot works, comply fully with them. A failure to do so is likely to result in there being no cover if they are responsible for a resulting fire.
There are also potential implications for employers in circumstances where their contractors fail to comply with those requirements.
At Edwin Coe we specialise in advising policyholders in the event of a loss both in terms of seeking to enforce the terms of a policy against the insurer and in claims for professional negligence against insurance brokers if the right advice was not given to the insured about any provisions dealing with the use of heat.
If you have any questions regarding hot works provisions compliance or require advice in the area of insurance litigation, please contact Oliver Pannell, Lauren Murphy or any member of the Insurance Litigation team.
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Please note that this blog is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content of this blog.
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