I was reading Building magazine over the weekend and came across Rudi Klein’s article entitled “2025: Making it Happen”.
In the article he refers to Integrated Project Insurance.
It seems an interesting idea, an insurance product that covers cost overruns up to an agreed liability cap. Linked to it is associated latent defects cover.
This product appears to be aimed at insuring against the financial disaster than can arise with a cost overrun.
The insured can include the client, consultants, contractors and their supply chains. There is an assurance process, an independent check to be carried out on the robustness of the costs before a project is accepted as insurable.
I gather that this is being piloted on one project with two more potentially in the pipeline.
For more details it is worth looking at the Cabinet Office Government Construction paper dated July 2012; SEC Group papers and articles in Construction News and Construction Enquiries website.
It made me pause and wonder whether the construction world be a better place if there is “centralised” insurance of design liability and of cost overruns. That might do away with a lot of disputes between parties.