- New and untrained employees.
- Many work sites.
- High-value, mobile equipment.
- Outdoor work, with consequent susceptibility to weather and theft.
- Use of hazardous equipment under ever-changing conditions.
- Difficult-to-predict conditions of ground, weather, internal building components, and labor supply.
- Time-sensitive work, susceptible to strikes, subcontractor failure, and other delays.
- Workers mingling with those of other firms, making it hard to control the work environment.
- Vulnerability to financial markets.
- Operations in foreign countries and the associated political risks.
- Design build operations and the associated risks.
- Various types of construction contract from standard to manuscript.
- Joint Ventures
These conditions pose a special challenge to the risk manager to:
(1) be closely involved in early project planning, and;
(2) be on work sites frequently to be aware of field conditions.
Construction insurance policies must be specially designed to respond to the particular circumstances. Some of
the types of policy and bond are as follows:
- Standard property and casualty policies to cover the fixed office and plant operations.
- Contractor Equipment Floater.
- Builder risk / Course of construction / Business Interruption / Delay.
- Wrap-up liability – comes in various forms, some of which are not really wrap-up.
- Workers Comp.
- Decennial Liability – A form of products-completed operations insurance sometimes required of contractors doing
work in a foreign country. It provides ten years of coverage to the owner of a construction project for repair or replacement costs in the event of a complete or partial collapse.
(Decennial means lasting ten years or occurring every ten years.).
- Various types of surety bond. Contractors and Subcontractors. A blanket sub-contactors policy (Subcon) is now available, which removes the necessity of separate bonds for each sub – A type of finite risk insurance.
- Crime / employee theft.
- Kidnap & ransom for foreign projects.
- Political risk insurance for foreign projects.
For definitions of various forms of insurance refer to Insurance Marketplace
- Builders Risk (All Risk Coverage)
- Builders Risk All Risk (including Design Error)
- Construction Wrap-Up Liability
- Lloyds through Lloyd’s brokers
- Lumbermen’s Underwriting Alliance
- Sovereign General
- Trans Canada Insurance Marketing Inc.
- Manitoba Heavy Construction Association
- McGraw Hill Construction – Resources.
- Risk Management For Contractors
- Surety Association of Canada
- Winnipeg Construction Association
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