Construction insurance types

Subrogation is the right that all insurers have to step into the shoes of the insured and seek compensation from other defaulting parties. For example, if a sub-contractor negligently causes a fire damaging the contractor's works, the contractor can claim against their all-risks insurance policy for the cost of rectifying the damage, but the insurer can, in the name of the contractor, sue the subcontractor for their outlay.

Joint names insurance is the term used for insurance policies that are effected in the names of 2 or more parties. Most common among such policies is the contractor's all-risks insurance which is, almost without exception, effected in the joint names of the contractor and the employer and sometimes includes subcontractors and consultants too.

The big advantage of a joint names policy is that the insurer waives its rights of subrogation against the parties named in the policy. There is, therefore, no post-event litigation between 2 or more insurance companies and the parties named in the policy can focus on rectifying the damage and completing the project, rather than looking to find a party who was to blame.