Back To Basics: An Introduction To Construction Insurance Policies

Insurance is a vital element of any construction and engineering project. The potential liabilities of parties such as the employer, contractor and professional consultants are significant, as are the losses that would be sustained if those parties did not have the financial resources – or appropriate insurance cover – to meet such liabilities.

Almost all construction projects are therefore supported by insurance: without adequate insurance cover, funders may not be willing to proceed and projects may therefore be withdrawn.

In certain circumstances statutory obligations will also underpin the need for insurance.

As part of our Back to Basics series of insights, we discuss below some of the types of insurance that are often maintained by parties in the construction industry, the main types of risks to which they respond, and the scope of the cover they offer.