ABSTRACT
Insurance is a principal means of risk financing but insurance should never be the first line of defence to any risk scenario. The objective allocates the risk to the party best able to manage the risk with insurance as the fall back solution should something go wrong. Insurance is an integral part of a risk management strategy, its most important function being the financing of risk. The insurance has a specific period of insurance being the estimated construction period which will need to be extended if the works duration over runs. The premium is also calculated on the estimated construction cost and is adjusted upon completion at the actual construction cost. This insures the property against physical damage caused by a risk that is not otherwise excluded. The insurance covers legal liabilities that exist in common law or civil codes provided that it arises from injury to third parties or damage to third party property.
