Introduction1

17.01 A contract of insurance is a contract under which an insurer agrees to indemnify2 an identified or identifiable person against a loss suffered by that person, or to restore a loss that has been suffered.3 Put another way, it is a promise by an insurer to hold a person harmless against a loss, or to make good the loss suffered by that person.4 Insurance plays a key role in risk allocation in virtually all construction and engineering projects.5 Contracts relevant to a project may reflect this, by requiring one or more of the parties to the project to take out and maintain insurance against particular risks, in favour of identified persons.6 Additionally, statute law may in certain instances, most notably in relation to residential building