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Major construction projects normally contain major risks for all the parties involved; purchase of insurance often provides a shifting and reduction of risk. In many major construction endeavors the owner elects by developing a Coordinated Insurance Program to purchase some or all of the insurance for the other participants. Decisions concerning this program include the basic decision to establish such a program and the specific decisions of what form the program should take. The first basic decision is often made by the owner's in-house forces by evaluating a checklist of pros and cons. Specific program definition requires a thorough risk analysis of premium costs, absorbed losses, and impacts on incentives to perform.
David Ashley (Mon,) studied this question.