Construction Law/Insurance


Dear Elliot,

Hopefully my email finds you well....
We awadrded a Contract for wood chipboard factory, the contract included the following term in relation to insurance:
''All loss or damage from whatever cause arising for which the CONTRACTOR is responsible for under the terms of the Contract''
As such CONTRACTOR shall obtain the sufficient insurance coverage and in light of the above term. we have defects in floor slabs and we are requesting the CONTRACTOR to cover this issue as it is part of insurance terms but he is refusing to execute the required repairs justifying that by the intention of insurance doesnt cover this kindly please clarify the issue.


Dear Ahmad Ghannam,

You do not mention the form of contract, nor the applicable law, so the following comments will be general in nature.  

Insurance is intended to recompense one party or the other for acts which are outside their control, such as accidents which are caused by third parties or acts of rebellion or war.  The risks, and the responsibility for them, are defined in the Contact.  They are not intended to cover the results of negligence or bad workmanship.  

The defects in your floor slabs are probably due to bad design or bad workmanship, which are not insurable risks.  Also the Contractor will not want make a claim on his insurance premium as future premiums will be increased to cover the cost.  I suggest that you google 'Contractor's all risks policy' to get a better understanding of its purpose and use.  

Construction Law

All Answers

Answers by Expert:

Ask Experts


Peter M. Elliott


First response to queries regarding extensions of time, variations orders, site instructions and payment using FIDIC and other forms of Conditions of Contract, based on English Law, and derivatives only. Anyone who needs advice about EoT should download and study the SCL Delay & Disruption Protocol before submitting a question.


Value . . .
It's unwise to pay too much, but it's unwise to pay too little. When you pay too much you lose a little money, that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing you bought it to do.
The common law of business balance prohibits paying a little and getting a lot. It can't be done. If you deal with the lowest bidder, it's well to add something for the risk you run.
And if you do that, you will have enough to pay for something better.
. . . John Ruskin (1819 - 1900)
"We are too poor to buy something cheap"
.Romanian Proverb 2002
A lean compromise is better than a fat lawsuit. George Herbert (English poet 1593-1633)
I said it in Hebrew, I said it in Dutch,
I said it in German and Greek:
But I wholly forgot (and it vexes me much)
That English is what you speak!" Hunting of the Snark - Lewis Caroll
Match your presentation to the reader!
The joy of food lasts but an hour, of sleep but a day, of a woman, but a month, but the joy of a building lasts a lifetime. Syrian proverb.
Comments and observations leading to improvements in the translation of FIDIC Red & Yellow books into Romanian prior to approval by FIDIC (reference 'Preface to the Romanian edition')

Institution of Civil Engineers, Association of Chartered and Certified Accountants, Society of Construction Law, Dispute Resolution Board Foundation

B Sc(Hons) in Civil Engineering

©2016 All rights reserved.