ABSTRACT
This chapter aims to consider the relationship between the allocation of risk and insurance and discuss the various products currently available in the insurance market. Construction contracts invariably impose insurance requirements on one or both parties to ensure that funds are available to meet claims and to facilitate the completion of the works. Professional indemnity insurance is relatively expensive and some contractors or sub-contractors would not normally carry it. In the immediate aftermath, the UK Government was forced to intervene in the insurance markets to provide cover for the aviation industry in order to keep planes flying. Single project insurance has developed due to the deficiencies of the more traditional insurance arrangements whereby an insurance policy taken out by any of the parties to a construction project only covered the liability for that party. An employer can himself take out insurance to cover project delays in completion of building works.
