Interaction Between Construction, Insurance and Law Part 2

rules pertaining to remuneration and failures.2 Five of these rules specified the standard required to be achieved in a building contract and prescribed penalties for those who had the misfortune not to comply with it. They were:
229 If a builder builds a house for a man and does not make its construction firm and the house which he has built collapses and causes the death of the owner of the house that builder shall be put to death.
230 If it causes the death of the son of the owner of the house they shall put to death a son of that builder.
231 If it causes the death of a slave of the owner of the house he shall give to the owner of the house a slave of equal value.
232 If it destroys property, he shall restore whatever it destroyed, and because he did not make the house which he built firm and it collapsed, he shall rebuild the house which collapsed at his own expense.
233 If a builder builds a house for a man and does not make its construction meet the requirements and a wall falls in, that builder shall strengthen the wall at his own expense.

Figure 1.1 shows rules 230 and 231, two of the five rules mentioned above, written in the original cuneiform script. The severe penalty imposed by these rules ensured that building work achieved the required standards of construction and safety and helped to ensure that houses were free from the defects resulting from bad design, materials or workmanship. The assurance that this would be so was based on the principle of ‘an eye for an eye’ in accordance with the law of that time, a principle that still exists today in some legal systems. However, there was little provision for restitution and a lot more retaliation in the rough justice of that era.
Although the current concept of construction insurance was unknown then, the notion of ‘risk, responsibility, liability and indemnity’3 was embodied in the spirit of those rules. It could therefore be said that the first systematic risk management process for the problem of defects in construction was devised at that time and although it was simple in its concept, it was nevertheless to the point.4 It is interesting, however, to note that the general principle of insurance of loss-sharing must have been realised even at that early stage of the development of social needs. Under section 1 of Hammurabi’s Code, which dealt with property law, the principle was embodied in the following text of rule 23:5