Project Insurance

CIC established a special response group on project insurance following recommendations from the Strategic Forum for Construction on investigating a model for a single insurance policy for the whole project.

The need for looking at project insurance was seen in the context of the following background:

• An approximate sum of £1bn a year is being spent on insurance in construction.
• Two thirds of construction PI claims are made prior to construction completion.
• Clients lack a proper conception of types of risk and their allocation.
• There is a waste of time and money in negotiations and collateral warranties.
• No more client power for a policy on the building they want to purchase.

The response group is working to establish a model for project insurance that can eliminate the high premiums, save time and efforts, and strengthen the position of the client through a single policy. The group is working in parallel with other similar initiatives in the industry and seeking government and market interest on project insurance.

The response group reports to the Strategic Forum joint construction/insurance group.