The November/December issue of SA Affordable Housing will feature Insurance and Risk Management. To whet your appetite for that, here are a few insurance tips.
Professor Maritz, Acting CEO of the JBCC, explains that legally, a contractor is required to have the following insurance (on top of Professional Liability which is part of the short-term insurance policy of any professional):
- Contract works (often called Contractors All Risk [CAR]):
- Off-site storage
- Site risks
- Defects liability period
- Public liability
“It is either the contractor or the employer who takes this out, and it is enforced in the contract which spells out who will take out the insurance,” says Maritz. In many instances the employer will wish to do so because it may have a large number of projects underway of which the current is just one of many covered in an umbrella policy which it can get cheaper than the contractor.
“Everyone employed on a site must have Public Liability, as an incident can happen to anyone. This, together with Sasria, is part of any short-term insurance policy and we all have it.”
Then there are some secondary insurances, which are not legal required but are often taken out for particular reasons:
- Contracting parties Workman’s Compensation Act compliance
- Contracting parties common law liability compliance
- Construction equipment – All Risks cover for contractors and sub-contractors
- Motor vehicles liability insurance
- Multilateral Motor Vehicles Accident Fund Act no.93 of 1989
- Balance third-party and passenger liability
“A big concern these days is high risk insurance: lateral support, marine cover for imported equipment and marine advanced loss of profits. The former is compulsory for State projects, but otherwise is not. But covers risks where the loss can (and has) bankrupted contractors. Contractors will sometimes take a chance on the geotechnical report, and when things go wrong it can bankrupt them,” says Maritz.