In a bid to enhance safety and accountability in the construction sector, the government recently enacted Legal Notice 166 of 2023, introducing the Construction Industry Licensing Regulations, 2023. These regulations are set to revolutionize the way contractors providing service activities in demolition, excavation, piling, and construction are regulated.

The definitions of crucial terms like ‘demolition,’ ‘excavation,’ and ‘construction’ have been meticulously outlined in the Building Construction Authority Act (Chapter 623) following an intense parliamentary committee debate, in which I had the privilege of being actively involved as a government advisor. During these discussions, the rationale behind this legislation was thoroughly explained, and various perspectives were considered.

A significant aspect of Legal Notice 166 of 2023 lies in the requirement for contractors to have appropriate licensing, ensuring that only qualified and responsible entities can undertake construction-related projects. This move is a giant leap forward in maintaining high industry standards and safeguarding the public from subpar workmanship.

One of the noteworthy provisions of Legal Notice 166 is Regulation 5(3), which stipulates that license holders must ensure any works undertaken in the service activities listed in Schedule I are covered by a valid insurance policy. This policy must provide coverage against losses or damages that may arise due to any act or omission by the licensed contractor or their workers during the project’s execution. Furthermore, it must also encompass damages sustained at the worksite, including bodily harm suffered by an employee.

However, it should be noted that this regulation does not explicitly require contractors to personally obtain insurance on their behalf. The current reality is that larger contractors usually have insurance policies in place, but this is not consistently the case for smaller contractors.

Yet, in a recent development, the Malta Developers Association (MDA) has taken a firm position, calling for mandatory insurance coverage at both the licensing stage and every renewal for all contractors.

The core message of the MDA’s statement suggests that smaller contractors might find themselves unable to rely on developers to cover the costs of essential insurance, which has become a vital requirement before starting any construction projects.

Now, politicians must carefully consider whether the situation as portrayed by the MDA is an inescapable requirement or reiterate the notion that achieving the political objective of ensuring everyone is covered by insurance before commencing work is more important than debating who bears the cost of the premium.