Whenever any activity takes place in the construction industry, no matter how small, a certain amount of risk is evident. This is why it's important for all parties concerned to be covered by the right type of insurance and for the contractor, specifically, to be adequately protected. It can be quite a difficult area to grasp, but it's nevertheless crucial to understand what types of service and activity have to be insured through things like civil contracting insurance, so that the proper policy is put in place from day one. What do you need to consider, as a new contractor?
Whenever you offer to provide civil contracting services to another entity for a financial return, then a number of risks immediately materialise. For example, you could provide improper advice or be accused of professional negligence. You could manage the project poorly leading to cost overruns and a claim against your inefficiency, or you could choose materials that were not of the correct specification.
While you may be sure that you are not guilty of any of those charges, you will nevertheless need to have insurance in place in case the legal system does not agree with you. You may, in turn, avoid this type of accusation altogether, but be let down by a subcontractor on site. Remember, even though you may be able to "go after" a subcontractor for their own negligence, it's likely that you will be pursued by the client directly.
In the ultimate scenario, you have to be fully covered for any one of these scenarios, as they could cause delays to the client and subsequent costs that they won't be happy with. This is why you will need professional indemnity insurance that's very specific and is meant to protect you as the expert, who has a "duty of care" to others. Government regulations will invariably require you to have this level of insurance before you can advertise your services in the marketplace.
You will also be required to have public liability insurance that will cover you should any physical damage or injury occur to the premises that you're working on, nearby premises or any individual involved. This can include other contractors, the clients themselves, additional staff and the general public. You need to cover against something as relatively minor as a slip and fall in the workplace, to serious injury or death and the destruction of property due to negligence. Even though many of these occurrences are caused accidentally, even the smallest error could lead to a relatively large, public liability claim.
Going into Detail
Make sure that you have a detailed discussion with your insurance agent, so that you can discuss all the risks you're likely to encounter and get the proper level of coverage.