Insurance / Indemnity

At Quigg Golden, we help construction professionals navigate the complexities of insurance, from policy selection to claims and coverage disputes, ensuring your legal and commercial risks are properly managed throughout the life of a project.

Need clarity on your construction insurance? Speak to Quigg Golden for expert legal advice on cover, claims, and risk management here.

What is insurance?

Insurance is a means of protecting yourself or a business from unforeseen events that may result in financial loss. By paying a premium to the insurer, you receive a policy that outlines the specific events covered. If any of these events occur, the insurer is contractually obligated to cover the associated costs. For example, if an accident or theft occurs on-site and these events are included in the policy, the insurer will cover the financial losses incurred.

Claims and Coverage Explained

There are a number of different types of insurance and ways products are packaged that impact what you are covered for and how you are covered.

An important consideration is the difference between a “claims made” policy and a “claims occurring”. A claims occurring policy will cover you for the period of the policy, so your 2024 policy covers you for events that occurred during 2024, even if the claim is made in 2025, if the event occurred in 2024, it’s the 2024 policy that covers you.

Claims made policies are different, the 2025 policy will cover you for claims made in 2025, even if the issue occurred in 2024.

Another key difference is between policies which are on the aggregate and policies which are each and every. Under aggregate policies, the amount of your coverage is for all of the claims made combined, for each and every policy, the coverage is per claim.

General Construction Insurances

In the construction industry these are the common types of insurance:

• Public Liability
• Professional Indemnity
• Employer’s Liability
• All Risk Insurance

Public Liability

Public Liability insurance covers any claims made against a business by third parties (generally meaning people not involved in the project) due to the business’s activities that may have caused injury or damage to persons or properties. It may include product liability cover depending on the individual policy. It is generally available on a events occurring basis and either aggregate or on an “each and every occurrence” basis.

It won’t cover injury to your own employees, and there can be exclusions such as contract works, negligent design, workmanship and materials that are defective or loss or damage during the defects period.

Professional Indemnity

Professional Indemnity insurance provides protection for professionals and businesses against claims arising from negligence, mistakes, or omissions while delivering their services. It helps cover legal expenses and any compensation owed if a professional or business incurs financial loss due to the advice or services given.

In the construction industry professional indemnity is used by professionals such as consultants, it is also typically used by Contractors that have design responsibility and Sub-Contractors with design elements on a project. Generally, coverage is on claims made basis, so new policies need to be purchased to maintain cover for previous years, so a retiree may need to obtain run-off insurance.

Employers Liability

Employers’ Liability insurance is a type of insurance that all firms are required to have, under the ELCI Regulation 1998. The minimum cover required by law is £5m. This compensates an employee if they get an injury or disease due in the course of their employment.

All Risk Insurance

All Risk insurance is in the name, it covers ‘all-risks’ unless it is specifically excluded from the insurance policy. It covers accidental physical damage to works on a construction project. This type of insurance in some instances can extend to cover, plant, equipment and machinery, materials that are in transit and third-party liability. This type of insurance depending on the Insurance provider may operate on an annual basis or can be got just for a single project.

With this type of insurance there are some exclusions despite the name ‘all risk’. These exclusions are war, terrorism and pressure waves. You may need to carefully read the policies and consider any overlaps.

Conclusion

Insurance plays a vital role in the construction industry by protecting all parties involved from financial risk and unforeseen events. From accidents on site to professional errors or damage to property, insurance helps ensure that Contractors, Subcontractors, and employers are covered against a wide range of liabilities. Each type of insurance, such as public liability, professional indemnity, employer’s liability, and all-risk insurance, serves a specific purpose and addresses different risks that can arise during or after construction projects. While the details of insurance policies can be complex, understanding the basic requirements and responsibilities is essential from legal perspective.