👉🏻Red book 2017 Clause 19 stipulates the Insurance requirements that have to be fulfilled by the Contractor as part of the risk transfer mechanism during the performance of the Contract.

19.2.1 The Works (Works defined as ‘the Permanent Works and Temporary Works’)

👉🏻The Contractor is required to insure in the joint names of the Contractor and Employer the following:

(a) the Works and Contractor’s Documents, together with Materials and Plant for incorporation in the Works for their full replacement value.

(b) an additional amount of 15% or such other amount as may be specified in the Contract Data. The insurance cover specifically excludes wear and tear, shortages, and pilferages after Taking Over by the Employer.

👉🏻The insurance cover to be provided by the Contractor may exclude any of the following:

(1) the cost of making good any part of the Works which is defective’

(2) indirect or consequential loss or damage, including any reductions in Contract Price for delay’.

(3) wear and tear, shortages and pilferages’

(4) risks arising from Exceptional Events’

19.2.2 Goods (Contractor’s Equipment, Materials, Plant, and Temporary Works)
The Contractor shall insure (in joint names of the Contractor and the Employer) the (Contractor’s) Goods for their full replacement value including delivery to Site. The wording ‘full replacement value’ means that the insurance term ‘like for like’ will apply in any settlement of claim.

19.2.3 Liability for Breach of Professional Duty
This sub-¬paragraph is applicable only if the Contractor is responsible for the design of a part of the Permanent Works. The insurance shall indemnify the Contractor against liability should the Contractor’s design not be fit for the intended purpose.

19.2.4 Injury to Persons and Damage to Property
The Contractor is required to insure (in the joint names of the Contractor and the Employer) against liabilities for death and injury to any person arising out of the performance of the Contract.

19.2.5 Injury to employees
The Contractor shall insure his employees in respect of injury, sickness, disease, or death of any person employed by the Contractor and any of the Contractor’s Personnel (which includes the personnel of Subcontractors).