This insurance only excludes the works so that other property belonging to the

Employer is intended to be covered as the clause title of sub-clause 23.1 (Third

party insurance - including Employer's property) indicates. This insurance is to
be in joint names, but is to include a cross-liability clause. The effect of these
provisions is that the Employer and the Contractor may act individually in respect
of a claim, despite the insurance being in joint names.

Other obligations in relation to insurance are imposed by clause 21 (Insurance of

works and Contractors Equipment). Clause 24.2 (Insurance against accident to
workmen) and clause 25 (Evidence and terms of insurances).

Part II provides alternative wording in the event that the Employer decides to take
out the insurance himself. See also Part II for clause 21 (Insurance of Works)
and clause 25 (Evidence and Terms of Insurances).

CLAUSE 24 : Accident or Injury

The Contractor is to indemnify the Employer against all damages or

compensation payable to any workman employed by the Contractor or any
subcontractor unless his death or injury results from an act or default of the
Employer.

The Contractor shall maintain insurance against accident or injury to workmen or

shall procure that subcontractors maintain insurance indemnifying the Employer
and that the subcontractors produce to the Employer on demand proof that the
insurance is current.

The rather strange wording of this clause is taken, with minor amendments, from
the 3rd Edition. As with all the insurance clauses, the requirements for the
insurance to be approved by and produced to the Employer have been removed
to clause 25 (Evidence and Terms of Insurance).

24.1 This contract cannot regulate the Employer's liability to third parties which
are likely to be governed by local laws. The ineffectiveness of the first sentence
is recognised by the second in which the Contractor agrees to indemnify the
Employer in respect of the same liability. This indemnity is qualified by clause 65
(Special risks) which protects the Contractor from liability for damage, injury or
loss of life arising from items (a) to (d) of clause 20.4 (Employer's risks), provided
that the rebellion etc. referred in in item (b) takes place in the country where the
works are taking place.

It is important to note that, despite the clause title, the terms of the clause go
beyond accidents or injuries and cover any damages or compensation payable.
Thus any payment upon the dismissal of an employee would be covered, for
example where the Engineer required the removal of a person under clause 15.1

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(Contractor's superintendence) or clause 16.2 (Engineer at liberty to object).
Equally the clause title is misleading in its reference to workmen as the provision
covers all employees.

"...the Employer, his agents or servants". As in clause 22.2 (Exceptions), it is

submitted that the Engineer, and thus his design, is covered by this phrase. See
the commentary under clause 44.1 (Extension of time for completion) item (d) on
this point.

24.2 The immediate difficulty with this clause is to ascertain exactly what "such
liability" refers to. At first sight it seems to refer only to the Employer's liability for
its acts or defaults as that is the only context in which the word "liable" is used in
clause 24.1. Whilst that interpretation would satisfy the immediate concern of the
Employer, the draftsman probably intended to oblige the Contractor to go further.
If so, two options remain: either that the insurance is to cover the Contractor's
liability; or that all accidents and injuries to workmen are to be insured.
Presumably, as the Employer is concerned to see evidence of the existence of
such insurance, it is intended that the Employer's liability for its acts and defaults
is intended to be covered as well. It is further presumed that "such liability" does
not infer an obligation to insure against liability to pay damages or compensation
to employees due to their dismissal from the site or otherwise in relation to their
contracts of employment. It must be doubted that such insurance would be
available on the market.

There is no express minimum or limit to the amount of insurance required under

this clause. Local laws could impose additional obligations in relation to the
insurance of the workforce, however.

For the subcontractors' insurance to indemnify the Employer it would normally

mean that the Employer would have to be named in the policy.

Other obligations are imposed in respect of insurance by clause 21 (Insurance of

Works and Contractor's Equipment), clause 23 (Third party insurance) and
clause 25 (Evidence and terms of insurances).

"... any persons are employed by him on the Works". If the last workmen on site
are employed by a subcontractor, the Contractor's insurance is permitted to
lapse. If the workmen are not covered by a subcontractor's insurance, this could
represent a gap in the insurance protection given to the Employer. Problems are
frequently generated by the definition of employment which may well be
governed by local law. For example, employees of the Employer will often be in
training with the Contractor in relation to the operation of the project. This training
may be full-time and the trainees may be under the control and supervision of the
Contractor: the question of who is their employer for the purposes of this clause
will not necessarily be straight-forward.

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CLAUSE 25 : Terms of Insurance

The Contractor shall prove to the Employer before starting work that the required
policies of insurance have been taken out. He will also supply the policies to the
Employer within 3 months of the Commencement Date. The Engineer should be
kept informed. The Contractor's policies must be with insurers and in terms
approved by the Employer.

The Contractor will keep the insurers informed and maintain adequate insurance
throughout, producing policies and proof of payment of premiums on demand by
the Employer.

If the Contractor fails to provide or maintain the policies, the Employer may do so
and deduct the premiums from sums due to the Contractor.

The Contractor and the Employer will indemnify each other against any breach of
the terms of any policy.

Sub-clauses 25.2 and 25.4 are new to the 4th Edition. In the 3rd Edition, the
obligation now contained in sub-clause 25.1, to obtain approved insurance and to
produce it on request, was repeated in clauses 21, 23 and 24. Sub-clause 25.3
contains the additional sanction that if the Contractor fails to provide proof of the
policies, the Employer may take out his own insurance at the Contractor's
expense.

25.1 The obligation to "provide the insurance policies to the Employer" does not
apparently mean that the Contractor is to leave the policies with the Employer as
he is required to produce them again upon demand under sub-clause 25.2.

"Such insurance policies shall be consistent with the general terms agreed prior
to the issue of the Letter of Acceptance". The intention and effect of this
sentence is obscure. There are three specific clauses detailing the nature of the
insurance policies and an overriding requirement that both the terms and the
insurers must be approved by the Employer. The insurance is
to come into effect when the Contractor starts on site which will normally be
some months after the Letter of Acceptance. Thus the reference to "general
terms agreed prior to the issue of the Letter of Acceptance" is baffling,
particularly as it is the Letter of Acceptance that signifies the existence of an
agreement between the parties. The draftsman is perhaps intending to indicate
that the terms of the policies and the identity of the insurers should be discussed
and the approval of the Engineer obtained during the negotiations leading up to
the Letter of Acceptance.

The approval of the Employer to the terms and supplier of insurance is subject to
clause 1.5 (Notices, consents etc.) and must not "unreasonably be withheld or
delayed".

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