Large projects are often delivered by several companies together: a consortium for a tender, a joint venture for a development, or an ad hoc collaboration for a particular phase. Working together brings joint liability – typically joint and several towards the client – and the insurance structure has to reflect that. There are two routes: a joint policy, or separate but coordinated cover.
- In a consortium, liability towards the client is typically joint and several – members answer for each other's mistakes too.
- Joint policy: one CAR for the project, with every member in the insured circle – the route with simpler claims handling.
- Separate cover: can work, but calls for precise definition of the boundaries (who's liable for what, and up to where).
- The insurance clause in the consortium agreement matters just as much as the one on dividing the work.
Why is this even a question?
Because each member's own cover is tailored to their own company – but in a joint project, the boundaries blur: a shared site, work packages that run into each other, shared use of plant, and joint and several liability towards the client. If everyone is insured only for "their own" part, damage between members and shared mistakes fall into a grey zone – exactly where disputes are born.
The joint policy route
Project CAR's natural answer: one policy for the whole works, with every member of the consortium (and their chain) in the insured circle. Its advantage is that damage to the works is settled within the policy, cover is typically less prone to gaps, and the client sees a single certificate – but liability losses that members cause one another still need a cross-liability clause, just as existing property needs its own separate extension. The practical questions are: who is the policyholder (the lead member or the project company), how the premium is split, and who handles the administration – these are worth settling in the consortium agreement, following the logic of the policyholder-model article.
The separate cover route
If the division of work is sharply separated (different phases or different sites, for example), cover per member can also work – but here, defining the boundaries is critical: what happens with shared areas, damage caused between members, and shared temporary works? And towards the client, the full set of certificates together needs to add up to the required picture. This route calls for more administration and more precise clause work – with legal input.
The factors behind the decision
The more interwoven the work (a shared site, a shared programme, shared plant), the stronger the argument for a joint policy; the more separate it is (standalone phases), the more workable the separate route becomes. On a tender, the tender documentation can also set the direction – in that case, it prevails. The specific structure is decided by the shape of the project: this is typically a question worth talking through at a consultation before signing the consortium agreement: how the consultation works.
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