top of page


Collateral warranty update

October 2019

Collateral warranties are being added to an increasing number of contracts as a result of parties wanting more and more protection during and after building contracts. Consequently, this imposes additional onerous requirements and draws parties into potential situations that arise, which can have a sizeable impact on businesses.

In this insight, we have outlined the key information relating to collateral warranties and the many benefits that our arrangement with Mills & Reeves can offer you in dealing with these matters.

What is a collateral warranty?

A collateral warranty is a contractual document that can exist between two or more parties. It can be enforced on its own and is put in place where there is no existing relationship between the parties. A collateral warranty allows direct claims (e.g. by funder against sub-consultant) / claims in contract, not tort. A collateral warranty can be read as a short form version of the sub-contract or appointment assignment.

Why do we review collateral warranties?

The review process thoroughly checks that they are no more onerous than the insured’s original appointment/contract. Importantly, this process also ensures that the insured does not enter into a contract that would risk seeing a claim against them subsequently becoming uninsured as a result of the policy’s terms and conditions. Additionally, this review gives the benefit of another layer of risk management for the insured.

How can you access this collateral warranty scheme?

To begin the process, you will need to share the names of all parties to allow the undertaking of conflict checks prior to advice being provided. The entities you will need to provide details on are the beneficiary, consultant/sub-consultant, contractor/sub-contractor, employer, funder, project/site address and the relevant policy.

With this efficient partnership, you will receive advice in pdf form within 2 working days. This will provide you with a unique Traffic Light review for just £130.00 + VAT.

To find out more about how we can help you with collateral warranties, please call us on 020 8450 5336.


020 8450 5336

bottom of page