Construction Insurance – It Always Ends up in Tears

If there is one industry where projects tend to up in tears, it’s construction. And this is why sound construction insurance is not just a good option, but a necessity.

Construction insurance helps guard against spats when it comes to project over-runs, damage during the works and arguments with the finished job.

Take a major road-building job which could see a project run for three, or four years, and involve so many facets and components, that it would be impossible to see the whole project and its implications right from the outset.

Think about the contractors working on widening the UK’s aging network of motorways. Some of the M1 widening work started way back in 2008 and much of its won’t be finished until 2013. And these projects tend to last for around three to four years.

When these projects are tendered, quoted and then won, both the customer (often the Government) and the contractor (often public quoted companies), just cannot envisage the true size of the work and the effort needed.

Let’s take a common example in which the contractor digs up the ground at the side of the motorway and discovers a network of drains and culverts, which might have been there for centuries, but which no survey had yet unearthed. Who is responsible? The surveyors, the contractor, or the customer? Arguments can quickly ensue and the blame game joined with gusto.

This is where construction insurance can help. As if the need arises for a third party to help settle the dispute (an arbitration service, or even a court), then good cover can help soften any reputational, or financial implications.