ISR Additional Benefit # 2 – Government & Statutory Fees
Subject to the liability of the Insurer(s) not being increased beyond the Limit(s) of Liability already stated herein, the Insurer(s) will also indemnify the Insured for:…
(b) Any fee, contribution or other impost payable to any Government, Local Government or other Statutory Authority where payment of such fee, contribution or impost is a condition precedent to the obtaining of consent to reinstate any building(s) insured hereunder; provided that the Insurer shall not be liable for payment of any fine and/or penalties imposed by any such Authorities.”
Before I explain this particular Sub-Clause and those that follow it, I would point out that all the remaining additional benefits other than Architects’ Fees which I covered last time, (see http://www.allanmanning.com/?p=1831) (namely Sub-Clauses (b) to (g) inclusive) do not need to be included in the Declared Values.
This Additional Benefit (b) covers more than planning permits paid to local councils. It provides cover where a local council imposes levies for the provision of car parking, drainage, and other extraneous items as a precondition to the granting of building approval. It may be possible for the Insured to appeal against any such levy. With insurance cover available, many Insureds may prefer to simply pay the fee. However, it would be prudent and in line with the underlying principle of the insurance cover of “utmost good faith” that the Insured make the decision in consultation with the Insurer. An ongoing Section 2 (Interruption Insurance) claim will need to be factored into the cost benefit analysis.
If the decision were taken to appeal the levy, then the costs of any such appeal should be borne by the Insurer, bearing in mind that the preceding Additional Benefit includes “legal fees”. I say this particularly where the appeal fails, on the proviso that the Insured notifies the Insurer in advance and it was a joint decision to appeal the levy.
I am not referring to the Insured having to build or extend its own car park, but a levy which the local authority uses to build or provide community parking. The same can apply for recreational parks and gardens and the like.