Contractors and architects explore personal indemnity

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The National Building Council has issued two calls for expressions of interest by insurance companies willing to provide all-round cover for contractors and architects rather than project-based insurance.

The contractors and architects must be registered with the Malta Development Association and the Chamber of Architects (Kamra tal-Periti).

The National Building Council is a partnership between the Malta Development Association and the Kamra tal-Periti to raise standards in the construction industry.

In a statement on its website, the council issued two separate calls to cover “the principal actors in the construction industry”.

The first invites insurers and brokers who are willing to provide annual Contractors’ All Risk (CAR) insurance to contractors authorised to operate by the BCA.

The council said the objective is to ensure that all authorised contractors are covered by insurance, thereby providing peace of mind for the public, authorities, clients, and their professionals.

“It will also drastically reduce the bureaucratic nightmare of needing to insure every individual project,” the council said. This had been a main stumbling block in discussions with the MDA and the KTP on the insurance requirement included in the revised law.

The second call invites insurers and brokers to provide a group policy for architects and civil engineers to the Kamra tal-Periti. The objective is to provide comprehensive and affordable Professional Indemnity Insurance (PII) cover for members of the profession. This is a critical step before bringing into force the provisions of mandatory insurance for all warrant holders prospected in the recent Periti Act.

The issue of an insurance policy for contractors and architects has been pending since last summer when the government published a legal notice that stipulated that contractors licensed to carry out demolition, excavation and construction works must ensure that any work has an insurance policy covering third-party damages and damages to workers.

But the Malta Developers Association, the Kamra tal-Periti and the Association of Insurance Brokers had criticised the law, with the MDA describing it as “weak and ineffective”.

The government should have drawn up an insurance policy for contractors as a pre-requisite to obtaining a licence, the MDA and Kamra tal-Periti had argued. 

MDA president Michael Stivala said an insurance policy on contractors as a prerequisite to licensing would create an additional filter to protect workers further and give peace of mind to concerned third parties.

The government reacted to criticism by saying that the insurance requirement was left out as insurers were unwilling to go along with it.

The Insurance Association of Malta had defended the government’s decision not to make insurance coverage a prerequisite for licensed contractors, saying “there is no such thing as an annual insurance to cover all risks”.

Adrian Galea, director general of IAM, had said that when consulted on new laws on licensing building contractors, the association argued that insurance should not be a requirement to issue a contractor licence and that such a product did not exist.

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