CONSTRUCTION: Arranging Construction Insurance
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LETTING the clients business drive insurance choices will avoid duplication of cover – or, worse still, the kind of gaps in cover that can destroy a project.
“Inadequate insurance cover can be catastrophic and costly”, says David Dyer, head of Western Cape Business Development for Alexander Forbes Risk Services.
Choosing the correct insurances in the construction business requires close attention to project and client needs.
As such, Alexander Forbes Risk Services has a specialist construction division, with extensive experience in arranging comprehensive insurance programmes for a variety of clients ranging from one-off building projects to major contracts such as the World Cup soccer stadiums and the revamping of the major South African airports.
Services developed specifically for the construction industry include:
• Liaison with client’s project team to identify the risks associated with a project
• Risk management advice to mitigate risks associated with major construction projects
• Development of Contract Conditions with client’s legal team
• Advising on and evaluating Contractual Agreements, and their bearing on insurance
• Liaison with technical advisors to the lenders
• Preparing an insurance programme that considers contractual obligations and risk exposures
• Providing secure insurance carriers
• Designing bespoke policy wordings for project insurances
• Arranging any local statutory insurances
• Establishing a claims handling procedure
• Preparing risk management and loss control reports
• Delivering a broad and cost-effective insurance and reinsurance programme
• Hands on involvement in the settlement of claims.
“Importantly, professional insurance advice should be sought as project negotiations begin, so that insurance issues relating to concession agreements, construction contracts and various loan and security documents can be addressed as they arise,” says Dyer.
While projects should not be over-burdened by insurance, the core project insurance programme should nonetheless provide acceptable cover to the principal, its lenders and the contractor - supplemented where necessary with specialist insurances such as Project Professional Indemnity, Lateral Support, Project Delay/Consequential Loss, or Inland Transit and Marine risks.
After project completion it is equally important that insurance continues to provide the widest possible cover for assets, revenue streams and liability exposures.
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