Legal Indemnity Insurance for Construction Projects

December 22nd 2020
Legal Indemnity property Insurance

Whenever you’re looking to start a construction project, you need to make sure you have lots of different legal and insurance aspects covered before you even begin. A lot of the work that goes into these projects has a lot of money riding on it, so you need to be careful in terms of how they eventually pan out. Big companies expect big results, so nobody is going to be okay should any errors be made.

One aspect that many constructors must take into account is legal indemnity insurance. While it may not be something you’ve heard of all that much, it holds quite a significant amount of value and should be considered heavily. Let’s delve into it a little more.

What is Legal Indemnity Insurance

Legal indemnity insurance will typically cover the buyer and a mortgage lender in the event of lost value on a property – usually via a defect or something similar. The defect isn’t fixed or improved directly; it’s simply a case of restoring via financial compensation should a loss be made. Typically, the kinds of things that are covered by indemnity insurance have low chances in terms of money being lost – it’s something that usually would never falter. If a defect were to become apparent, though, then the loss may be a very significant number. Indemnity insurance can help all kinds of business and buyers with a transaction should any issues cause delays.

How it Pertains to the Construction Industry

In terms of constructors, it is there to protect contractors and sub-contractors in the event that claims are made against them with regard to issues in the work they’ve put in. The idea is that the work may have caused their client a loss and that they’re not too happy with the flaws in the build. Things like incorrect designs, professional negligence, and many other factors can be taken into account when picking out reasons for potential losses.

It provides cover to the construction contractor for things like defense costs and any damages awarded in relation to the mistakes made.

Who Should Have It?

Using the previous points, you’ll know that contractors will need to make sure they have indemnity insurance as the coverage could save them a lot of money in the event of a legal case. They’ll also need it in order to keep or to restore their reputation should anything gonegatively. This kind of financial compensation could be the difference-maker with regard to staying afloat or going out of business.

What Are The Real Benefits?

As we’ve just mentioned, keeping money and making sure you stay alive as a business will be the biggest benefit of them all. Saving money when trying to grow as a business is a hugely stressful job even without dissatisfied clients breathing down your neck. Keeping a solid reputation and not buckling under pressure matters a lot. It’s also important to be covered so that you and your staff can work with less of a burden on their shoulders – meaning they’re less likely to make mistakes.