A construction site is where liability questions cluster: ten contractors working on one plot at the same time, the neighbour's wall an arm's length away, street traffic just beyond the fence. In an environment like this, the question “whose insurance pays?” comes up daily. This article sorts out how business liability cover relates to project-level insurance – with a focus on where one ends and the other begins.
The contractor layer: every participant's (main contractor's and subcontractor's) own public liability insurance – this follows them onto every job, on this project and beyond it (see the contractor article). The project layer: construction/erection-all-risks insurance taken out for the specific job, which typically handles both the property risks of the work under construction (storm, theft, breakage during the build) and the project's related liability losses (cracks in a neighbouring building, injury to third parties around the site). The details of the project layer – when to take it out, who should, and what to watch for – are the territory of our sister site: epites.biz.
Four recurring situations. Neighbour damage: a crack next to the foundations, a crane jib swinging over a boundary – a project-level question, but the liability of the specific contractor who caused it can also arise; the contracts settle how the two fit together. The site compound: damage within the fence typically belongs to the project layer, while damage outside it – along a delivery route, on public land – is often the contractor layer's territory. The subcontractor chain: who is included as an insured party under the project insurance, and who needs their own cover (see the chain article). Defects after handover: project insurance runs for the construction period – damage arising from defects that show up after handover belongs to the world of contractor cover and warranty questions (see temporal scope).
Before starting a project, clarify three questions in writing: whether project insurance exists, and whether you're included as an insured party under it; what the main contractor expects from you as your own cover (see client requirements); and whether your own policy's list of insured activities and territorial scope covers the specific work. The answers belong in the contract documentation – they'll count if a claim happens.
Good protection for a construction business has two layers: standing business cover (the territory of this site) plus clarifying things project by project, with project insurance for larger jobs (epites.biz). To assess the business layer: a free consultation.
During an apartment-block extension, cracks appear in a neighbouring building's wall after the foundation works. The neighbour approaches the developer, the developer points to the contractor, the contractor points to the subcontractor who did the foundations. Who pays? The answer depends on the web of contracts and insurance: whether project insurance exists, and whether its liability section covers damage to neighbouring buildings; how the contracts along the contractor chain divide liability; and what the involved contractors' own cover can do. On a well-organised project, this web is put together before work starts – with a condition survey of neighbouring buildings (the best defence against an “old crack or new?” dispute). On a disorganised one, relationships crack along with the wall. For the details of the project layer: epites.biz.
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