The problem they solve
A consultant is appointed by one party but their work affects others. A funder lending against a building, a purchaser buying it, or a tenant taking a lease all rely on design they did not commission and have no contract with. A collateral warranty creates that contractual link.
Who typically provides them
Consultants with design responsibility, which includes the structural engineer. Main contractors, and sub-contractors with a design element, are commonly asked as well.
What they usually contain
An undertaking to have exercised reasonable skill and care, an obligation to maintain professional indemnity insurance at a stated level for a stated period, and provisions allowing the beneficiary to step in if the original appointment ends.
Third party rights as an alternative
Rights under the Contracts (Rights of Third Parties) Act can achieve a similar outcome without separate documents for every beneficiary. Which route is used is usually decided by the funder rather than the consultant.
The practical advice
Raise it at appointment, not at completion. The form and the required insurance level are usually specified by the funder, and discovering at practical completion that a warranty was expected in a form nobody agreed is an avoidable delay. Send the proposed form early and it becomes a five-minute conversation.
Tell us what you are building.
Send the drawings or describe the project. We confirm scope, deliverables and a realistic timescale.
Start a project