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Contractors' negligence liability a burning issue

By: Series: Construction News ; (6372) 6 September 2001, 40(1)Publication details: 2001Subject(s): Summary: Many construction contracts contain a clause requiring the employer to take out insurance to cover the risk of damage to its property. Such clauses can have the unexpected effect of protecting a negligent contractor or subcontractor, who accidentally damages an employer's property, and preventing the latter from recovering damages. Discusses a number of cases which illustrate this scenario. Advises employers to ensure it is clarified, in all contracts, what effect an obligation on the employer to insure will have on his rights to claim damages for negligence from the involved contractors.

Many construction contracts contain a clause requiring the employer to take out insurance to cover the risk of damage to its property. Such clauses can have the unexpected effect of protecting a negligent contractor or subcontractor, who accidentally damages an employer's property, and preventing the latter from recovering damages. Discusses a number of cases which illustrate this scenario. Advises employers to ensure it is clarified, in all contracts, what effect an obligation on the employer to insure will have on his rights to claim damages for negligence from the involved contractors.