The construction industry is

incredibly diverse, and every

trade presents its own risks,

which means that each

insurance policy should be tailored to meet

the requirements of the individual company.

Public and employers’ liabilityHaving public liability insurance in place is

essential for every construction project,

and if you’re a contractor you may find it

is required under your contract. Its

purpose is to make sure you are covered

if a member of the public is injured or

their property is damaged because of

your business.

If you have employees, whether these

are contractors or casual labourers, it is a

legal requirement in the UK to take out

employers’ liability insurance. It will cover

claims from employees who have been

injured as a result of working for you. For

example, a workplace accident that

results in catastrophic injuries could mean

that an employee is no longer able to

work, or needs to have their home

adapted to meet their changing needs.

Professional indemnityOften thought of as a cover for

businesses who offer advice, professional

indemnity insurance (PII) is also important

for the construction professions,

especially contractors working as part of

the design team in a project. Also known

as errors and omissions insurance (E&O),

it will cover the cost of defending a claim

of negligence.

For example, if the specialist materials

are essential to a design specification,

and a problem occurred where the

materials failed which meant the work had

to be redone, the contractor could be

incorporated in a claim of negligence.

JCT clause 6.5.1Most people in the construction industry

will be familiar with JCT contracts. The

suite of standard forms, produced by the

Joint Contracts Tribunal, is considered the

most popular construction contracts in the

UK. What often gets neglected is clause

6.5.1 in the JCT, which places a

requirement of the contractor to organise

joint non-negligent damage insurance for

themselves and their client.

Public liability cover will indemnify the

contractor against accidents or damage

on site that are caused by their own

negligence, but an odd twist in case law

means that a contractor can be held

responsible for damage, despite not

being at fault. For example, if a

neighbouring building suffers damage

PROFESSIONAL BUILDER DECEMBER 2017 I 29

BUSINESS SOLUTIONSCONSTRUCTION INSURANCE

� CIRCLE NUMBER 024

got it coveredAny construction project has a potential risk of loss ordamage. Here, Peter Lycett-Williams from AMB Insuranceprovides a guide to some of the insurances required by theconstruction industry.

@Adobe/Photocreo Bednarek

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