Insurance

Question 1

What is insurance?

Answer 1

• Risk spreading mechanism that spreads the losses and liabilities of the few amongst many.
• Provides third-party protection against risks by providing indemnity for a party
• Insurance is common in construction to provide protection both for the insured, and for the party to whom the insured has a liability.

Question 2

What is indemnity?

Answer 2

Indemnity = one party accepting the responsibility to pay for any loss or damage caused by the other.

Question 3

What is Joint Names Insurance Policy?

Answer 3

• Policy taken out in the names of two or more parties (usually the Employer and Contractor but can also be sub-contractor).
• Claims cannot be made by a party against the other
• Advantage: reduces insurance costs for the project.

Question 4

What are the insurance options under Minor Works?

Answer 4

5.4A - Joint names, new works.
5.4B - Joint names, the works and the existing structures.
5.4C - Works and existing structure to be insured by ‘other means’.

Question 5

What are the insurance options under Intermediate?

Answer 5

Option A - Contractors All Risk - New build
Option B - Employer All Risk - New build
Option C - Employer All Risk - Existing structures

Question 6

What insurance option was selected in your case study?

Answer 6

Option C - Employer All Risk - Existing structures

Question 7

What is Pool Re Cover?

Answer 7

Under IC the insuring part is required to take out terrorism cover.

‘Terrorism Cover’ is defined as ‘Pool Re Cover’ and is insurance against loss or damage to works and site materials resulting from terrorism (cl. 6.10).