Ritically compare the traditional approach of insurance protection with the modern approach of Project Insurance.

Title: CONSTRUCTION INSURANCE
Construction projects involve high risks. Defects and accidents inevitably occur, leading to losses including personal injuries and property damage. Consequently, such projects are often concerned with questions of insurance cover.
Regarding insurance policies, two approaches can be distinguished. The traditional approach has been that each stakeholder has taken out separate insurance policies. The main types have been Professional Indemnity Insurance, Product Liability Insurance, Employers Liability Insurance, Public Liability Insurance, and Contractor s All Risks Insurance. A modern approach, in contrast, is a multi-party insurance for the whole project team which is known as Project Insurance.
School of Construction management and Engineering
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©University of Reading 2010 Wednesday, 24 February 2010 Page 2
There are several arguments in favour of Project Insurance. First, under the traditional approach, the parties are automatically in an adversarial framework when a problem arises. This often promotes a  blame culture. Modern forms of procurement attempt to set up more collaborative relationships between the stakeholders. One important piece in this jigsaw is considered to be Project Insurance because it encourages the parties to work together towards a solution instead of concentrating on how to avoid liability. Second, the traditional approach has posed a major problem for designers. On the one hand, owing to the conditions of Professional Indemnity Insurance, small design practices are often limited in bidding for large projects. On the other hand, once designers have won a contract, they have to notify to their insurer whenever a problem arises during the construction period  even if the problem has nothing to do with their part of the design  and the insurance company may require the designer to consult the insurance company s legal advisors before making any statement concerning the problem at issue. The consequence of this is that the designer cannot contribute to the solution of the problem. The use of Project Insurance avoids this situation.