ABSTRACT
Death, injury of people and damage to property are all real possibilities in construction projects and so are risks which any contract needs to address. Three interrelated concepts are usually used to cope with the particular risks: allocation of liability, indemnity and insurance. The purpose of insurance is to ensure that those covered are compensated should the covered risks materialise. Any mismatch or lack of clarity in insurance coverage may therefore give rise to arguments, at a time when delays and complications will only exacerbate an already difficult situation. Insurance is a complex and specialist subject area. The contractor’s liability for injury and death of employees is met by its employers’ liability insurance. This insurance is compulsory under the Employers’ Liability Act 1969. If an insurance policy is in place, the insurance company will compensate the client. It is vitally important that all insurance matters are sorted out before the project starts on site.
