Contractors often find themselves insufficiently protected in serious construction accidents.

The headline screamed “Injured Cyclist awarded record S$8,650,000” for attention.

Hyundai Engineering & Construction was the main contractor when a bundle of overhead cables at a construction site under its charge struck a cyclist. As a result, the cyclist suffered post-traumatic stress disorder (PTSD) which required frequent, long-term hospitalization, medical expenses and home care.

Most contractors in Singapore buy Construction All Risk insurance with a Third Party Section with limits specified by the developer in their building contracts.

There are two things that contractors should note. First of all, the building contracts specifies minimum prescribed limits. However, the contractor’s liabilities are not limited to such limits.

A sum of S$8,650,000 awarded against a company may put enough financial stress to cripple its day-to-day operations. How then should a contractor protect itself against such “shocks” without losing its competitiveness when they tender for projects?

If you wish to explore possible solutions, please feel free to contact us.