By Greg Goldfayl
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Extra resources for Construction contract administration
Insurance of these risks is a routine requirement in building and construction contracts. Contractors are not required to indemnify owners against claims from the contractors’ own employees for personal injury or death. However, insurance of these risks, too, is a routine requirement in building and construction contracts. It should be noted that not all risks are insurable and, hence, even a fully insured contractor may well be out of pocket after indemnifying the owner for costs that are not claimable under either mandatory or elective insurance policies.
Standard contracts are available to suit a wide variety of project types and contractual arrangements and a suitable contract may be selected from these to suit the project in question. The major obligation of the contractor is to complete satisfactorily the work of the project by the date for practical completion. The corresponding responsibility of the owner is to pay the contractor the contract sum in exchange. Neither the owner nor the contractor may sign over their rights under the contract to a third party without the approval of the other party to the contract.
Insurance of the contractor’s employees must be ‘effected’ by the contractor in all instances (that is, they must take out the insurance policy), since they are clearly the exclusive responsibility of the contractor. This allows the contractor the flexibility of insuring either the workers on a particular site or, alternatively, all the workers on all of the contractor’s sites. The latter arrangement makes it possible for the contractor to take advantage of the lower premiums which are likely to be available through spreading the risk over a number of projects and therefore a larger number of employees.