Safety VS Insurance
Mar 31, 2026
Not Just Safety: How the Regulations May Change Insurance Claim Outcomes
By: Itzick Simon
The regulations are not insurance regulations, but they will directly affect underwriting discussions, claims assessment, and the allocation of responsibility between developer, contractor, and role-holders. In simple terms: an incident that is not managed in accordance with the regulations does not only create a regulatory issue—it may also turn a claim that should have been covered into a more complex, prolonged, or only partially compensated claim.
Three key points stand out:
1. Threshold Conditions Become Insurance “Failure Points” An incident on a site where a required role-holder was not appointed, written approval was not provided, reports were not maintained, or the safety plan was not updated after a material risk change, will also be viewed by insurers as a significant failure in risk management.
In some cases, non-compliance with the regulations may be used as a basis to argue that site management did not meet the reasonable standard of care required under policy conditions.
2. Professional Exposure of Role-Holders Safety controllers and site directors are not only operational authorities. They also produce approvals, reports, and professional decisions.
In certain cases, this raises questions of professional liability, not only operational responsibility. Where these decisions involve professional judgment and risk assessment, they may be examined on a personal liability level—not only at the project level.
3. Expanded Exposure of the Developer Since the developer becomes a gatekeeper at the start of the project and remains involved in key approval points throughout, it becomes more difficult to argue that responsibility lies “entirely with the contractor.”
This may be relevant to construction all-risk policies, third-party liability, employers’ liability, and directors’ and officers’ insurance, depending on the circumstances.
This is an applied analysis derived from the regulatory structure, not an explicit insurance provision within the regulations themselves. However, it should be noted that many standard policies in Israel include general duty-of-care provisions. In practice, in complex claims, the question is not only what happened, but how the project was managed: what was documented, who approved what, and how risks were handled in real time.
It should also be emphasized that in the absence of documentation, the issue is not merely difficulty in proving compliance—but an inability to demonstrate that the actions were actually carried out. In such cases, even reasonable conduct in practice may appear, in hindsight, as a lack of management.
The requirement is not for isolated documentation, but for the ability to demonstrate a continuous chain of control, reporting, and risk management throughout the lifecycle of the project.
Mapping operational failures and their insurance implications
The table below shows the direct relationship between operational failures in website management and their potential implications when examining an insurance claim. It highlights how gaps in regulatory compliance, documentation, and risk management can translate into legal exposure and loss of insurance coverage.
The practical significance of litigation management
The implication arising from the above is not theoretical. In complex insurance claims, the starting point is not only the event itself, but also how the project was managed.
The absence of appointments, gaps in documentation, or discrepancies between the safety plan and actual execution are not viewed merely as technical defects, but as part of the overall risk management picture. In such cases, the question is not only whether damage occurred, but whether it can be demonstrated that the project was managed in accordance with a reasonable standard of care and control.
It should be remembered that in many cases, insurance policies are subject to preconditions and underwriting surveys, which include reference to the management structure, appointment of role-holders, and the existence of control mechanisms. Failure to meet these basic requirements—such as lack of required appointments or a gap between requirements and actual implementation—may be interpreted as an aggravation of risk or as non-compliance with loss mitigation measures, and may be used by the insurer as a basis for limiting coverage, delaying claim handling, or in some cases even rejecting the claim.
In other words, the less the control mechanisms, documentation, and accountability are actually in place, the wider the gap becomes between the existence of insurance and the ability to realize it in the event of a loss.
It should also be emphasized that even in the absence of actual damage, non-compliance with regulatory requirements may be considered a regulatory violation and may lead to enforcement action.
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