Case Study – Construction

case study construction
Case study


Services delivered

  • Insurance program reviews
  • Insurance program design, placement and management


A design, fabrication and construction contractor had uncertainty at senior and middle management level as to if, or to what extent, their insurance will respond under the contractual conditions agreed to with principals and head contractors.

Overall there was a need for greater understanding of the insurance response mechanism at the core operating insurance policies by this client. We assessed that a restructure of the contract negotiation framework would be required to remedy the insurance problems. Our goal was to provide clarity so our client could negotiate proactively, rather than reactively when dealing with principals and head contractors who were insisting on onerous contract conditions.


Allegiant IRS identified an opportunity to engage the legal expertise of McCullough Robertson to help structure a contract negotiation framework (known as Contracting Pillars), which provides guidance in achieving a proportionate risk allocation when negotiating contracts. Our key objectives through this engagement were to:

  • Help the client identify undesirable risk clauses and provide practical tools to negotiate better conditions
  • Align the clients’ contract risk profile with its insurance program
  • Design an insurance program that acknowledged the contractors challenges, dovetailed and aligned with identified insurable risks
  • Help protect the contractors balance sheet from unexpected commercial risks, and
  • Provide the contractor with an informed and structured approach if commercially compelled to accept uninsurable risks in contract with known ultimate financial outcomes.


By achieving this alignment of risk and transfer, Allegiant was able to provide the client with significant peace of mind that their contracting principles, if followed, protected their business and allowed them to contract with confidence. Additionally, by being able to ‘sell’ a well managed and robust risk profile to insurers, Allegiant was able to:

  • enhance cover as insurers were more comfortable in accepting onerous exposures due to the improved risk management process through the client’s adoption of the Contracting Pillars, and
  • reduce costs on both liability and contract works insurance programs by an average of 15%.

The seamlessness of the Allegiant / McCullough process was brilliant. The peace of mind knowing that if a contract goes pear-shaped, we know exactly what the cost to our business will be – worst case.