FIDIC contracts (pre-2017 editions)—insurance
FIDIC contracts (pre-2017 editions)—insurance

The following Construction practice note provides comprehensive and up to date legal information covering:

  • FIDIC contracts (pre-2017 editions)—insurance
  • The FIDIC insurance provisions
  • Liability or risk in the works
  • The Contractor’s risks
  • The Employer’s risks
  • Insurance of the works (contractor’s all risks insurance)
  • What are the liabilities of the Contractor and the Employer for public liability to third parties?
  • What are the public liability insurance requirements?
  • Employer’s liability insurance
  • General insurance provisions

FIDIC contracts (pre-2017 editions)—insurance

This Practice Note considers the insurance provisions in the 1999 editions of the FIDIC Red, Yellow and Silver Books. For guidance on the 2017 editions, see Practice Note: FIDIC contracts 2017—insurance.

The FIDIC insurance provisions

The insurance requirements in the FIDIC contracts, setting out which party takes out insurance, the amount and the type of cover required, can be found in:

  1. the letter of acceptance of tender

  2. the particular conditions (amendments to the general conditions), or

  3. the general conditions

This list is the order of precedence for determining which insurance provisions apply.

The below sets out the requirements in the general conditions.

Liability or risk in the works

The Contractor’s risks

The Contractor’s liability for the works, that gives it an insurable interest in the works, is found at clause 17.2. The Contractor is required to take care of the works until take over. Any damage to the work must be rectified at the Contractor’s own risk and cost unless the damage was caused by an Employer risk.

The Employer’s risks

The Employer risks are:

  1. war, invasion, etc

  2. rebellion, terrorism, etc

  3. riot, commotion unless involving the Contractor’s personnel

  4. damage caused by weapons or radiation

  5. damage caused by aircraft

  6. use by the Employer of the works unless this was specified in the contract

  7. the Employer’s design

  8. the unforeseeable force of nature

Note that terrorism is clearly an Employer risk under the

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