Construction Insurances in Cyprus

In a construction project – including and not limited to #residential, #shop, #officebuildings, #hospitals, #energyproductionplants – the contractors shall enter into #insurance plan.

Below are the 5 must-have types of Construction Insurances:

1. All risks insurance – This insures against physical damage to the works (and usually materials on site). All risks insurance typically covers the full reinstatement value of the works plus a mark up for any ancillary costs (such as consultancy and professional fees) that are incurred.
2. Public liability insurance – This provides cover for liability arising out of death or personal injury to third parties (but not the contractor’s employees, who should be covered by worker’s compensation insurance) or damage to property belonging to third parties (but not the works, which is covered by the all risks insurance) prior to the works being taken over.
3. Workers’ compensation insurance – This insures the contractor against liability for the death or personal injury to its employees (usually on site) when performing the works.
4. Delay in start-up insurance – Unless the contractor is entitled to relief under the contract, contractors are customarily required to pay liquidated damages to the employer if the works are not taken over by the date for completion or, depending on the nature of the works, fail to satisfy specified output criteria. However, liquidated damages are customarily capped at 10% of the contract price.
5. Professional indemnity insurance – This insures contractors with design responsibility (i.e. under design and build contracts) against liability arising out of professional negligence and will respond if, for example, designs do not comply with the requirements of the underlying construction contract (although it is not uncommon for professional indemnity insurance to exclude cover for “fitness for purpose” warranties).