Optima Insurance Brokers Pvt. Ltd.

Suitability

This policy is designed to protect the interest of civil contractors and Firms involved in construction activity against the damage or destruction of various civil engineering projects undertaken by them. The policy is suitable for all types of civil engineering construction works ranging from small buildings to massive dams as they are susceptible to damage by a variety of external and internal causes during the course of construction.

Salient Features

• This is a comprehensive policy designed to cover all risks associated with civil works right from the time of commencement of works at site till the contract works are taken over or put into use.
• The policy covers:
  • Fire / lightning.
  • Accidental damage during construction like dropping or falling, defective workmanship and material, lack of skill, negligence, malicious act and human error.
  • Act of God perils such as flood and inundation, earthquake.
  • Collapse, collusion, impact.
  • Theft and burglary, malicious and terrorist damage.

Extra covers

Policy may be extended to cover:

• Air freight
• Additional customs duty
• Express freight
• Over time wages
• Expenses for clearance an removal of debris
• Damage to surrounding property
• Third party liability
• Escalation in costs
• Contractor’s plant and machinery at the construction site
• Defects in construction, which surface during maintenance period for which the contractor is liable under the terms of agreement with the principal.

Benefits

Claims are payable at the prevailing market rates for restoration of affected property to the condition immediately before the occurrence of damage. Cost of any improvement and modifications will not be admitted. The amount of loss payable is subject to under insurance if any, and the policy excess.

Premium

Premium chargeable depends on the nature of the project, the project cost, the project period, geographic location and the period of testing. Discount in premium is allowed for large projects with sum insured more than 100 crores, the higher deductibles opted and for the fire protection available at the site. Premium may be paid in installments where the project period exceeds 1 year. In case of early completion of the project also, refund of premium may be claimed for the balance period of insurance.

Requirements

A completed proposal form giving full details of the project, its costing, details of additional covers sought.

Recommendations

Project costs are huge in view of heavy investments made by various agencies in infrastructure sector. Any loss or damage would throw the project haywire apart from causing heavy losses both financially and to human life. Defects in construction may also surface during the maintenance period. In order to safeguard the project and his own interest, a contractor should necessarily go for contractors all risk insurance.

Act of God

• Earthquake (Add on Cover)
• Volcanic Eruption
• Storm / Cyclone/ Tempest /Tornado/Typhoon / Hurricane
• Flood & Inundation

Social

• Riot
• Strike
• Malicious Damage
• Terrorism (Add on Cover)

Geological

• Land Slide
• Subsidence
• Expansive Soils

Fire Group

• Fire
• Lightning
• Explosion
• Implosion
• Impact
• Aerial Devices & Objects Dropped There From

Engineering

• Defective Materials
• Defective Workmanship
• Defective Product
• Collapse
• Faulty Erection
• Collision

Others

• Accidental damage during construction like dropping or falling
• Burglary and Theft

The policy covers loss or damage to all types of contractor’s construction equipment such as bulldozers, cranes, excavators, compressors, etc., due to an accident arising out of external perils. It covers movable equipment which is at work, at rest, is being dismantled for the purpose of cleaning or overhauling or during its subsequent re-erection.

The policy can cover all kinds losses due to accidents except:

• Loss or damage due to any internal electrical or mechanical break down, defective lubrication, lack of oil or coolant although any consequent external damage is payable.
• Loss or damage to replaceable parts or attachments such as bits, drills, knives, dies, moulds etc.
• Loss or damage whilst in transit from one location to another.
• Loss due to wear and tear, corrosion, rust, deterioration, atmospheric conditions.
• Loss or damage during testing operating or whilst being used for a purpose other than designed for.
• Loss or damage to machinery working under ground , unless covered by an endorsement
• Loss or damage for which the supplier or manufacturer is responsible either by law or under contract

The policy can be made more comprehensive by adding any or all of the following extensions:

• Owner’s surrounding policy
• Clearance and removal of debris
• Additional custom duty
• Air freight
• Express freight
• Dismantling
• Escalation
• Earthquake
• Third Party Cover
• Floater cover
• Terrorism

Sum Insured

The Sum Insured shall be equal to the cost of replacement of the insured property by new property of the same kind and same capacity, which shall mean its replacement cost, including freight, dues and customs duties, if any, and erection costs.