subject: Employers Must Insure Construction Projects [print this page] There are certain aspects of risk which must be taken into account and policies identified which have been designed with these specialized risks in mind when insuring construction projects.
To effectively assess the risks posed, an insurance underwriter needs to obtain a full description of the project as well as other essential information specific to the job as a whole. You will also need to supply the approach being utilized for construction and your site's location, along with its topographical and geographical order.
Additionally, details for the blueprints and drawings, a time schedule, the contractor's experience, the contractor of the kind of work recommended and the construction phase will be required.
It has been established that the contractors will be faced with the possibility of their work's subjection to harm, otherwise known as "Material Damage". There are some delegated policies that safeguard these subjections. Some of these exposures are the Erection All Risk, Contractors Plant, Contractors All Risk, Civil Engineering Completed Risks and Machinery All Risks.
With the possibility of property damage or personal injury claims by third parties, the payment of compensation might have to be a consideration. Liability Insurance covers these risks, which includes Employer's Liability and Worker's Compensation, along with General Third Party Liability and Public Liability protection.
A contractor may also default under the specific terms of his contract and indemnity. There are a few policies that protect against the variety of losses that can occur on a construction project, including Civil Engineering Completed Risks, Erection All Risks, and Contractors' All Risk. These policies cover everything from theft and burglary, earthquakes, strikes and civil unrest, hurricanes, and even fires.
You should obtain an "Advance Loss of Profits" type policy to insure against a loss of anticipated profits due to a project not being competed by the set contract deadline. This amount is determined by the Erection All Risks and Contractors All Risks policies.
Both of these offer coverage for compensation on personal injuries to third parties, harm done to the project and harm caused with the property as a result of the contractor's negligence.
When it comes to major construction project sites there are usually several representatives from legally independent businesses working together. The possibility of lacing injured third parties becomes the first challenge to be faced. Are those third parties neighbors living near the project, the staff on the job site, the owner of the properties or other sub-contractors who come in to work on the job intermittently?
This means the party, or parties, that are responsible for the injury or loss will be identified. Furthermore they will attempt to prove that it was that person's culpable conduct or negligence which caused their particular loss. General Third Party or Public Liability protection steps in here.
Policies that address public liability will completely indemnify any contractor who is deemed liable for the damages caused. This will be as compensation to a third party for bodily injury or damage to their property.
It must be proven, however, that the injury, damage or loss was caused as a direct result of the construction on the site or through negligence of the contractor.
The employer's liability is very similar to the public liability policy. This policy, however, will enable a contractor to provide his employees with compensation for any damage or bodily injuries to their properties. This compensation is dependent upon whether the cause was due to the employer's negligence or was due to a nuisance which resulted from the works.
Legally under the factories act and other regulations, contractors have a statutory responsibility to guarantee safety to all those they employ. This consists of employers that present safe working quarters for their staff, including a safe assemblage of tools, equipment and uniforms. Sufficient supervision by people qualified to do so both on the site as well as for the work is the employer's responsibility.
by: John Chambers
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