Posted by Art Of Legend India [dot] Com On 5:22 AM
Summary: In this blog post we will discuss about the common insurance policies used by businesses involved in the construction business.
Many things can go wrong in any construction project and therefore it is essential for the owners and the construction company to have necessary insurance in place to cover for any damages that might occur at the construction site. Construction insurance is mandatory in many states and countries across the globe and all construction projects are required to have the necessary insurance in place. Different types of construction insurance policies are available in the market and this gives construction companies varying options. Contactors and construction companies who are involved in the construction project opt for construction insurance. The owners of the property can avail the owner controlled insurance program (OCIP) insurance policy to safeguard against losses caused due to accidents in the construction site.
The basic classification of insurance policies is first party insurance and third party insurance. First party insurance policies will help to protect the owner’s interest. Third party insurance policies will help protect the people who are involved in the construction project from claims or liabilities t raised by others. Construction insurance policies can be classified further as Liability insurance, property insurance and surety bonds. Let us discuss about some of the common insurance types that are often opted for by construction companies and contractors while being involved in a project.
Most of the construction insurance policies are all risk insurance policies. These policies will cover any type of physical damage that is caused to the construction materials or to the project. These policies can be taken by the owner or the contractor and requires specific information regarding the person responsible for the construction. However, the contractor and the owner will have to maintain the policy contract jointly.
Various products like lift and escalators are supplied to the construction project by various businesses. Such suppliers will have to take a product liability insurance to help cover liabilities that might arise due to damage or injury caused due to their products.
A few liabilities can arise due to professional negligence. To help cover from such liabilities one can opt for a professional indemnity insurance. In the construction business, architects, design consultants, engineers and building contractors are usually required to have such insurance in place. Anyone who is involved in the designing and execution of a construction project will have to abide by the contract and failure to do so can result in claims being raised. Such claims can be covered by using these insurance policies.
This insurance policy helps to cover claims that will arise due to damage or injury caused to third parties. Any damage that has been caused to property of third parties can be compensated using this insurance policy.
Decennial insurance or latent defects insurance is an insurance policy that helps to protect the owner from the cost of repairing the constructed building after completion of the project. If there are defects found in the construction project, this insurance policy will help cover for the costs that will be incurred to repair the building. The policy tern for this policy is generally ten years from the date of completion of the project.
Gemma-Leigh Garner is an insurance analyst who has been researching on the variousconstruction insurance policies available in the market.