An incident that reminds us that construction risks are real.
The recent apartment building collapse in Petralona has raised serious concerns regarding construction safety and the liabilities Athat may arise during the execution of construction works.
Regardless of the exact causes of this incident, which are currently being investigated by the competent authorities, one fact is clear:
Every construction project, whether it is a new development, a renovation or the structural reinforcement of an existing building, involves risks that may lead to significant financial losses and legal liabilities.
For this reason, the right insurance cover is not simply a formality. It is an essential tool for protecting everyone involved in a construction project.
Who may be held liable when an accident occurs?
- The project owner.
- The contractor.
- The principal contractor.
- The civil engineer.
- The architect.
- The supervising engineers.
- The subcontractors.
Depending on the circumstances, any of the above parties may face compensation claims from third parties for:
- Bodily injury.
- Property damage.
- Damage to neighbouring properties.
- Legal expenses and compensation.
The three key pillars of risk management in a construction project.
General liability insurance for construction projects.
General liability insurance for construction projects protects the contractor and the project owner against third-party claims arising from accidents that may occur during construction works.
It is not mandatory for every project. However, it is often required by contracts, public tenders or publicly funded projects and is considered one of the most important risk management tools. Typical cover includes:
- Damage caused by lifting equipment.
- Legal defence against third-party claims.
- Employers' liability.
- Fire damage to neighbouring buildings.
CAR / EAR insurance – Contractors' all risks insurance.
Many people believe that general liability insurance is sufficient. In reality, it does not cover the construction project itself.
This is why CAR (Contractors' All Risks) or EAR (Erection All Risks) insurance exists. It can cover the project owner, the main contractor and/or all contractors, subcontractors, consultants, suppliers and other parties involved in the project.
It protects the construction project against accidental physical loss or damage during the construction period and also includes third-party liability cover. Typical cover includes:
- Earthquake.
- Natural disasters.
- Defective design.
- Defective materials.
- Third-party liability.
Professional Indemnity Insurance for Architects & Engineers.
This insurance relates to the professional liabilities of engineers and architects. It covers third-party claims arising from professional errors, omissions or negligence in the performance of their professional services, including:
- Incorrect design.
- Inadequate supervision.
- Design errors.
- An omission resulting in property damage or bodily injury to a third party.
Why are all three insurance policies necessary?
General liability insurance for construction projects protects against third-party claims for bodily injury or property damage that may arise during construction works.
CAR / EAR insurance (Contractors' All Risks / Erection All Risks) covers the construction project itself against accidental physical loss or damage during the construction period, while typically also including third-party liability cover.
Finally, professional indemnity insurance for architects and engineers covers liabilities arising from professional errors, omissions or negligence in the design, planning or supervision of the project.
None of these policies replaces the others, and prevention always costs less than a compensation claim.
For most construction projects, the cost of insurance represents only a small percentage of the total project budget.
By contrast, a serious compensation claim may lead to lengthy legal proceedings and significant financial consequences for the contractor, engineer or project owner.
The right insurance solution protects not only your assets, but also the continuity of your professional activities.
Conclusion
Incidents such as the one in Petralona remind us that even a construction project progressing smoothly may face an unexpected event with serious consequences.
The right insurance protection cannot prevent an accident from happening. It can, however, significantly reduce the financial and legal consequences for everyone involved in the project.
The role of the insurance advisor in construction projects.
Every construction project is different and requires a tailored insurance approach. Choosing the right insurance cover can protect both the investment and everyone involved should an unexpected incident occur.
What we can do for you free of charge:
- We assess your project and identify all potential risks.
- We recommend the most appropriate combination of insurance covers, including general liability insurance for construction projects, CAR/EAR insurance and professional indemnity insurance for engineers or architects.
- We support you throughout every stage of the project and handle the management of any claim or loss.
Protect your project before construction begins!
Whether you are planning a small renovation or a large construction project, prevention is always the best investment.
Don't let chance decide for you. The right guidance makes all the difference!
Contact us today!
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