There are 3 main insurance covers in the construction industry, namely 

1) CONTRACTORS’ ALL RISK INSURANCE
Contractors’ All Risk Insurance is specifically designed to cover the Insured against loss or damage in respect of contract works, construction plant and equipment and/or construction machinery as well as against third party claims in respect of property damage or bodily injury arising in connection with the execution of a building project.

A Contractors’ All Risks policy may be concluded by the principal or by the contractors engaged in a project, including all subcontractors. Contractors’ All Risk insurance provides an “all risk” cover – every hazard is covered which is not specifically excluded. This means that almost any sudden and unforeseen loss or damage occurring during the period of insurance to the property insured on the building site will be indemnified. The most important causes of losses indemnifiable under Contractors’ All Risk insurance are:

a) Fire, lightning, explosion
b) Act of God such as flood, inundation, windstorm of any kind, earthquake etc
c) Theft, burglary
d) Bad workmanship, lack of skill, negligence, malicious acts or human error

2) BONDS / INSURANCE GUARANTEE
Bonds, which may be required in almost every sphere of inter-personal and inter-corporation transactions are very wide in scope. It is not a form of insurance business but because of the fact that insurance companies are financial institutions, their bonds are acceptable, hence the involvement of insurance companies in bonding business, particularly those bonds which can generate other classes of insurance business for example, bonds business which is secured together with other project insurances like the Contractors’/Erection All Risks, Public Liability and Workmen’s Compensation insurance.

There are certain peculiar features in Bonds :-

a) A bond once given, cannot be cancelled before its expiry date.
b) All bonds issued to contractors for government projects are demand bonds and are worded in such a way that they can be invoked by the holder of the bond without any reason and explanation. Insurer is obliged to pay upon demand notwithstanding any dispute or protest by the contractor or insurer or any third party.

3) WORKMEN’S COMPENSATION INSURANCE
There is a small market for Workmen’s Compensation Insurance and this demand usually comes from :-

a) Contractors who are obliged to arrange such insurance under the conditions of the contract with the Principal. 
b) Employers with foreign workers who are not eligible to contribute to SOCSO but because of (a) above, usually include these workers in their insurance based on the wage roll of 15% of the total contract value. It should however be noted that the employer or their sub-contractors are also required under the provision of the Workmen’s Compensation.

This policy is designed to provide cover for any employee in the Insured’s immediate service against injury by accident or disease arising out of and in the course of this employment which his employer is liable to pay for such compensation either under :-

a) The Law (s) set out in the schedule of the policy 
b) Common Law