Contractor's All Risks Insurance
All types of civil engineering works, ranging from small buildings to massive dams are exposed to damage from a wide range of causes such as fire, lightning, flood, inundation, storm, cyclone and other accidental damages.
'Contractors All Risks Policy' is a comprehensive insurance which provides complete protection against all types of civil construction risks.
The cover can be taken jointly by the owner/ principal covering the interest of all other parties like main contractor, sub contractor, financial institution, bank etc
- It is an all risks policy covering loss or damage to the property by any cause other than those excluded. In particular the cover includes-
- Fire, lightning, explosion, aircraft damage
- Riot, strike, malicious act
- Flood, inundation, storm, cyclone and allied perils
- Landslide, subsidence and rockslide
- Burglary and theft
- Faults in erection
- Human errors, negligence
- Short circuiting, arcing, excess voltage
- Electrical and mechanical breakdown
- Collapse, damage due to foreign objects, impact damages
The sum insured for the insurance should not be less than the full value of the contract works on completion of the construction. Basically, insurance should be for the contract price.
Principals often supply contractors with materials on 'free issue' to be built into the contract works. These value would not have reflected in the contract price but the Sum Insured should be increased to cater for them.
- Extensions Cover can be extended to include up to a limit chosen by you on the following on payment of additional premium-
- Third Party liability
- Cross liability
- Cost of removal of debris
- Express freight, overtime charges
- Air freight
- Additional customs duty
- Owner's surrounding property
- Storage risk at Fabricator's Premises
- Breakage of glasses
- Maintenance cover-Visits, Extended maintenance
- Cost of tools and tackles and material handling equipment used for construction purposes
- Some of the exclusions under the policy are-
- War Invasion
- Nuclear Reaction Nuclear Radiation or Radioactive Contamination
- Insured's Contribution Deductible
- Willful Act or Willful Negligence of the Insured
- Cessation of Work
- Defective Material or Bad workmanship
- Wear Tear Corrosion Oxidation Deterioration
- Normal Maintenance or Making Good
- Disappearance or Shortage (Inventory Losses)
- Faulty design
- Loss of files, drawings, cash, cheques etc
- Consequential Loss
It is standard to apply excess to claims as neither the client nor the insurer wishes to be troubled with handling small losses. To comply with a client's wishes (e.g. contract conditions, financial policy or risk management programme), higher excess may be applied, with a suitable reduction in premium.
Going beyond the physical damage, future earnings of a business that has been prevented from operating, due to a delay in completing a construction or erection contract, could be protected by Advance Loss of Profit insurance.