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6.5 Insurance

Undertaking any project on a site that may hold potential liabilities can entail some risk. Insurance is a good way of managing that risk to ensure that if something does happen then provision is in place to cover the outcomes financially.

In many cases the insurance on a community project may already be covered through the land owners policy and may just require the notification of a change of usage. All the information below is designed to cover a broad spectrum of projects so try not to worry, the majority of times communication and conformation with the land owner will suffice. It is something that needs to be checked to ensure that you dont have any issues with the finished project but it isnt something that you need to unecessesarily concern yourself with - check/ inform/ confirm then move on with the project.

This section of the toolkit looks at what sort of liabilities can be present (liabilities are also considered under Liabilities and regulations) and the types of insurance that are available to cover such liabilities. Essentially what insurance is about is reducing risk to the project.

What risks are there?Insurance

Third party risks: If activities on the site result in damage to other people or other people’s property then those responsible for those activities may be liable for the damage. Similarly if the condition of the site is such that pollution spreads to off-site locations again those responsible for the site may be liable.

Risk associated with contamination or other remediation issues (if relevant): The existence of contamination can provide a number of risks in addition to those described above. Clean up costs can be unpredictable, as can investigative work and legal costs associated with any regulatory requirements.

Site work risks: Having either contractors or volunteers on a site undertaking work causes risks to exist. The work could also worsen existing problems or create new ones.

Risk involved in volunteers and community involvement: Involving community groups and volunteers in a project entails risk as undertaking site work can result in accidents and damage to people and property.

General risks: As with any piece of property there is a risk from flooding, vandalism and theft.

What insurance is available to cover the risks?

Not all sites will need all types of insurance but they are all likely to be worth considering. A broker will be able to provide expert advice.

Cost-cap insurance: If a remediation or essential work programme is required, or a contract for site works given, then this type of insurance ensures that if unforeseen problems arise during work that makes it go over budget increase in costs can be paid for.

Pollution liability insurance: This insurance covers the potential for previously unknown pollution on site to be cleaned up if such a situation arises. There can also be insurance available for cover if legal requirements change in the future requiring more work.

Public liability insurance: This covers compensation claims if people coming onto the site when it is open to the public if they injury themselves.

Employers’ liability: If people volunteer or are employed to work on the site and become injured then this insurance can cover the compensation that may be required.

General insurance: Insurance may also be required to protect against fire, flood, theft and damage etc. In much the same way as insurance is required for houses and other property.

Getting insurance

Insurance needed for the special conditions found on public sites requires the advice of a professional broker with experience of such requirements. There may be legal requirements for insurance as part of a lease agreement or requirements of funding organisations.

Insurance needs to cover those areas where the responsible organisation may be exposed to risk and liability and the cover must be adequate for those potential liabilities.

Insurers require a certain level of knowledge about a site before insurance becomes available. This is especially the case with derelict sites which may have been used by possibly unknown past activity and may therefore be contaminated. This usually is in the form of a risk assessment. It may also be dependent on agreeing some remediation activity.

Now let's make sure you're ready to move forward with the Making it happen checklist

Useful links

Find an insurance broker