Chapter 8: Insurance

This chapter explains insurance in the context of the construction industry. The decision to purchase insurance policies is examined. An uninsured excess, the maximum amount an insurer will pay and an insured’s obligations are explained. ‘Claims-made’ and ‘occurrence’ basis claims are distinguished.

Specific insurance policies are then outlined. Contractors’ all risks insurance (CAR) primarily refers to material damage cover for the contract works. Public liability insurance will provide indemnity for liability for damages arising from accidental injury to third parties (not employees) or accidental damage to third-party property as a consequence of the project. Cases involving claims for environmental costs against public liability insurance are reported. In Great Britain, employer’s liability insurance is mandated by the Employers’ Liability (Compulsory Insurance) Act 1969.