The November/December issue of SA Affordable Housing will feature Insurance and Risk Management. To whet your appetite, we continue with a few insurance tips:
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Contractors All Risks (CAR)
This policy is an All Risk policy covering you or, by written contract, your sub-contractors, onsite during the course of construction.
Cover can be arranged on a once off basis. Cover is based on the value and risk profile of that specific project. The cover will end when the project is complete. Alternatively cover can be arranged on an annual basis. Annual polices are slightly more comprehensive than the once-off cover. You’ll be quoted on your company’s Annual projection figures and Maximum Contract Value.
An Annual CAR policy will cover all projects your company undertakes for 12 months and are based on your annual turnover. The annual policy is a more cost-effective option.
What is covered (main inclusions):
- Physical loss or damage to the insured property. The Contract Works should cover the full replacement value of the work being undertaken (in other words, the cost of rebuilding at today’s prices). Included hereunder is Free-Issue Material.
- Surrounding Property – cover should be requested
- Inland transport – cover should be requested
- Maintenance – generally up to 12 months
- Testing and commissioning
- Removal of debris
- Off-site storage – cover should be requested
- Public Liability – cover should be requested
- Removal of support – cover should be requested
- Loss of profits – cover should be requested
What is not covered (main exclusions):
- Your tools and equipment
- Property belonging to sub-contractors
- Faulty design or workmanship
- Your vehicle
- Professional indemnity cover
- Consequential loss
- Non-performance or project delays
Multi-peril Commercial Policy
This policy covers the business assets of the construction company against perils such as fire, special perils, business interruption, theft, public liability to name a few.
A Commercial Policy is structured according to your unique needs. Covers that you should consider are:
- Property cover – covering your building from Fire and perils
- Fire cover – for your fixtures and fittings, stock, plant and machinery
- Business interruption cover – helps replace lost income following an insured event where your business is unable to operate. This cover helps replace lost profit, wages or rental income that results from things like fire or storm damage.
- Theft cover – covering the theft of stock
- Business All Risks – covering your tools and non-motorised equipment from theft and damage
- Electronic Equipment cover – covering your electronic devices from theft and damage
- Motor – covering sedans, LDVs, trucks as well as special types
- Goods in transit – covering your own goods in transit
- Employees liability – covering you when your employee is injured at work and you are held liable. Importantly all employees should be registered in terms of the Workman’s Compensation Act as all claims need to be submitted to COID first.
- Public liability cover – helps protect your business from liability claims. This can include customer slip and fall accidents and damage to someone else’s property that your business causes. Extensions that you should consider are:
- Work away – most policy wordings automatically include this. This will cover you and your employees when they are working away from the insured premises.
- Product liability
- Defective workmanship
Plant All Risks Policy
This policy covers you for the loss of, and damage to, plant and equipment, whether you own it or it’s hired-in.
What is covered (main inclusions):
- Physical loss or damage to the plant item. Cover can be based on new replacement Value or agreed value
- Hired in costs – cover should be requested
- Hired out costs – cover should be requested
- Credit shortfall cover – cover should be requested
- Public liability – cover should be requested
What is not covered (main exclusions):
- Road cover, other than crossing sites, unless policy has specifically been requested
- Damage due to wear and tear
Machinery breakdown policy
This policy, as the name indicates, covers you in the event of your machinery breaking down.
What is covered (main inclusions):
- Specified plant and machinery
- Unforeseen and sudden breakdown of plant and machinery
What is excluded (main exclusions):
- Loss or damage due to wear and tear
- Loss or damage to consumables
- Incompatibility
- Viruses
