𝗖𝗼𝗻𝘀𝘁𝗿𝘂𝗰𝘁𝗶𝗼𝗻 𝗜𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲: 𝗔 𝗞𝗲𝘆 𝗖𝗼𝗻𝘁𝗿𝗮𝗰𝘁𝘂𝗮𝗹 𝗢𝗯𝗹𝗶𝗴𝗮𝘁𝗶𝗼𝗻

Insurance in construction protects against design errors, accidents, and liabilities. It is a safeguard, not just a compliance requirement. Overlooking policy wording, coverage limits, or claims procedures can lead to costly disputes and financial exposure. Ensuring proper coverage, reviewing exclusions, and understanding claims conditions help prevent unexpected liabilities.

𝗪𝗵𝗲𝗿𝗲 𝗔𝗿𝗲 𝗜𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲 𝗥𝗲𝗾𝘂𝗶𝗿𝗲𝗺𝗲𝗻𝘁𝘀 𝗶𝗻 𝗖𝗼𝗻𝘁𝗿𝗮𝗰𝘁𝘀

𝙅𝘾𝙏 2016 – Clause 6 covers Public Liability, Employer’s Liability, and PI Insurance.

𝙉𝙀𝘾4 – Clause 83 outlines required insurances, Clause 84 sets minimum cover levels.

𝙁𝙄𝘿𝙄𝘾 2017 – Clause 18 mandates employer and contractor insurances, Clause 19 covers force majeure.

𝘽𝙚𝙨𝙥𝙤𝙠𝙚 𝙘𝙤𝙣𝙩𝙧𝙖𝙘𝙩𝙨 – Typically in General Conditions or Risk Allocation Sections.

Failure to maintain required insurance may breach the contract.

𝗞𝗲𝘆 𝗜𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲𝘀 𝗶𝗻 𝗖𝗼𝗻𝘀𝘁𝗿𝘂𝗰𝘁𝗶𝗼𝗻

𝙋𝙧𝙤𝙛𝙚𝙨𝙨𝙞𝙤𝙣𝙖𝙡 𝙄𝙣𝙙𝙚𝙢𝙣𝙞𝙩𝙮 (𝙋𝙄) Insurance covers design errors.
Example: An architect’s miscalculation causes defects.

𝙋𝙪𝙗𝙡𝙞𝙘 𝙇𝙞𝙖𝙗𝙞𝙡𝙞𝙩𝙮 𝙄𝙣𝙨𝙪𝙧𝙖𝙣𝙘𝙚 covers third-party injury or property damage.
Example: A pedestrian is injured by falling scaffolding.

𝙀𝙢𝙥𝙡𝙤𝙮𝙚𝙧’𝙨 𝙇𝙞𝙖𝙗𝙞𝙡𝙞𝙩𝙮 𝙄𝙣𝙨𝙪𝙧𝙖𝙣𝙘𝙚 covers workplace injuries.
Example: A worker falls from scaffolding.

𝘾𝙤𝙣𝙩𝙧𝙖𝙘𝙩𝙤𝙧’𝙨 𝘼𝙡𝙡 𝙍𝙞𝙨𝙠𝙨 (𝘾𝘼𝙍) Insurance covers damage to works and equipment.
Example: A fire destroys a partially completed structure.

Additional coverage may be needed for environmental risks, business interruption, or terrorism upon request for a additional cost.

𝗨𝗻𝗱𝗲𝗿𝘀𝘁𝗮𝗻𝗱𝗶𝗻𝗴 𝗣𝗼𝗹𝗶𝗰𝘆 𝗧𝗲𝗿𝗺𝗶𝗻𝗼𝗹𝗼𝗴𝗶𝗲𝘀

𝙀𝙖𝙘𝙝 𝙖𝙣𝙙 𝙀𝙫𝙚𝙧𝙮 𝙊𝙘𝙘𝙪𝙧𝙧𝙚𝙣𝙘𝙚 covers each claim separately up to the policy limit.
Example: A £5M per claim policy covers multiple £5M claims.

𝙀𝙫𝙚𝙧𝙮 𝙎𝙞𝙣𝙜𝙡𝙚 𝙊𝙘𝙘𝙪𝙧𝙧𝙚𝙣𝙘𝙚 covers all losses from one event under one limit.
Example: A storm damages multiple buildings, treated as one occurrence.

𝙄𝙣 𝘼𝙜𝙜𝙧𝙚𝙜𝙖𝙩𝙚 is the total amount an insurer will pay for all claims in the policy term.
Example: A £10M aggregate policy stops paying once claims reach £10M.

Misinterpreting these limits can leave businesses exposed.

𝗪𝗵𝘆 𝗜𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲 𝗠𝗮𝘁𝘁𝗲𝗿𝘀

MT Højgaard A/S v E.ON Climate & Renewables (2017) – The contractor was liable for design defects despite following standards.

OMS Environmental Solutions Ltd v. Cannon Viking Ltd (2019) – Insurance was denied due to failure to disclose risks.

𝗖𝗮𝘂𝘁𝗶𝗼𝗻 𝗳𝗼𝗿 𝗖𝗼𝗻𝘀𝘁𝗿𝘂𝗰𝘁𝗶𝗼𝗻 𝗣𝗿𝗼𝗳𝗲𝘀𝘀𝗶𝗼𝗻𝗮𝗹𝘀

Insurance is often overlooked until a claim arises. Always review contract clauses, confirm policy coverage, and ensure subcontractors have valid insurance.