7/27/2019 Why an Insurance Policy Matters in Construction Projects

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Why an Insurance Policy Matters inConstruction Projects

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Introduction

Construction insurance is an important policy to have if you own, run or manage a construction

site. Construction insurance provides safeguards for you as an employer against your

construction workers being injured on site. Construction insurance does not exempt you from

maintaining a safe workplace. Usually, construction insurance policies only pay out if a strict set

of health and safety guidelines are followed.

A Recently Completed 3- Storey Flat Mombasa

Contractors and Professionals

A public liability insurance policy carried by a contractor or a professional liability insurance policy

carried by a design professional generally indemnifies the insured if it incurs liability to a third

party. Insurers in fixing their rates must be able to predict their losses.

The professional liability insurer assumes its liability will be based on the normal professional

activity performed by its insured

The obvious therefore is that if you are dealing with quacks, there are no Professional

Standards to benchmark any risk and you cannot bring them to account. Quacks do not have

what we would call normal professional activity.

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7/27/2019 Why an Insurance Policy Matters in Construction Projects

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Requirements to Insure

In Kenya, the Agreement and Conditions of Contract for Building Works (Published by the Joint

Building Council/ Architectural Association of Kenya), provides for the requirement to insure as

follows:

a) Liability/Insurance Against Injury to Persons and Property_ Contractor shall be liable for

and shall indemnify the Employer in respect of personal injury to or death of any person arising

out of or in the course or caused by the carrying out of the works (with an exception of the

negligence of the Employer)

b) Insurance of the Works_(Contractors Liability) In the erection of new buildings, the

Contractor may be required to insure the works against loss and damage by fire, earthquake, fire

following earthquake, lightning, explosion, storm, tempest, flood, bursting or overflowing of water

tanks, apparatus or pipes, aircraft and other aerial devices or articles dropped therefrom, riot and

civil commotion etc.

Normally, the insurance covers all works executed and all unfixed materials and goods delivered

to / adjacent to the Works and intended to be incorporated into the works.c) Insurance of the Works_ (Employers Liability) The contract may also require the Employer

to insure the works almost for the same reasons as in (b) above. Upon request, in such

instances, the Employer should be able to produce the policies/ policy for inspection by the

Contractor.

d) Insurance of Works (Works of Alteration, repairs or extensions) The Employer takes the

responsibility but Contractor may, in the name of and on behalf of the Employer insure the

existing structures, the Works and unfixed materials against damage, loss or contingencies.

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