I. ENTRY
Construction is one of the sectors known as the riskiest in the history of the world. The probability of being faced with various types of loss or damage on a construction site is quite high.
Whether you are a contractor, civil engineer, or just someone who is considering making a construction-related investment, you need to protect your capital investments and ongoing work, or materials purchased for use in a project, against various losses or damages.
However, you are expected to comply with the deadlines you have committed to. However, any risk may arise to disrupt the smooth functioning of the entire construction process. Just in this and similar events like this, Construction “All risk” Insurance plays an important role.
II. DEFINITION
Construction ”All Risk” Insurance offers a comprehensive type of coverage by covering the risks that may arise during the construction period. Its general outlines cover the case of any loss and damage caused by a previously unknown and sudden reason, except for the exceptions shown in the policy during the construction period, during the construction site, during the guarantee period of the values that constitute its subject matter.
It covers damage or losses that may occur to property, equipment and machinery, third-party liability related to the work performed at the construction site and temporary works performed on site. The policy also provides protection against material losses or damages caused by fire under a fire insurance policy, which is covered by all-risk insurance under construction.
III. COVERAGE OF THE INSURANCE
Construction all risk insurance, buildings, water tanks, sewage treatment plans, overpasses, airports, etc. It is a comprehensive insurance policy that covers various construction-based projects such as Unless specifically excluded in the insurance document, this policy also covers any damage or loss incurred by contract workers during the construction process. Coverage of the insurance is mainly offered in the following two sectors:
- In terms of Material Damage: It covers the damage or loss or destruction of the property.
- In terms of the legal responsibilities of the insured due to the damages to be incurred by the third parties: It covers the legal liability of the insured contractor due to the loss or damage suffered by a third party.
Scope of the Coverage; In accordance with the contractor’s obligations under the terms of the contract, the legal responsibilities of the insured due to the damages incurred by the third parties during the works carried out during the maintenance period in order to eliminate the deficiencies and defects can be covered by an additional contract.
In addition to the general conditions of insurance, the parties have the right to decide on special conditions in accordance with the characteristics of the risk, provided that they are not contrary to the law and morality and by mutual agreement.
For example, it can be expanded to include the following events;
- Debris removal
- Damage to surrounding property owners
- Earthquake
- Third party liability
- Provision upgrade
- Terrorism
- Air transportation
- Additional customs tax
- Loss due to glass breakage
- Maintenance visits
IV. LIMITS
Although it is deduced that the name “ALL RISK” will cover all risks, some events are not covered by the insurance policy. For example:
- Intentional or negligent loss or damage
- Loss or damage due to incorrect design
- Strikes, lockouts, riots, popular movements, malicious acts and the military and disciplinary actions required by them
- Damage to existing buildings and facilities belonging to the insured parties, other than the insured assets.
V. HOW TO DETERMINE THE INSURANCE AMOUNT
For contractors and construction companies, “all risk” insurance can be an attractive option due to the extra coverage it offers.
Standard insurance policies cover the basics and the sum of the policies to be created separately can be expensive. All risk insurance is a more cost-effective insurance strategy as it combines many types of insurance. In this way, discounted pricing can be achieved on each.
VI. CONCLUSION
The explanations given above can be arranged differently for each contract type. In this respect, we would like to remind you that in this article, we evaluate the items that are emphasized in construction insurance and that the content and guarantees of each construction “all risk” insurance may be different. Some coverages may provide extensive protection against the risk of your company not complying with the deadline in the event of any loss or damage, while others may provide comprehensive protection against the legal liability of the insured due to third party damages. In order not to ignore such differences; We recommend checking the policy items, reading the terms of the policy, asking questions about the lower limits, additional payments and restrictions offered by the insurer. However, despite being careful, it would be beneficial not to sign any legal document and consult an expert lawyer without examining the general conditions of construction insurance, clauses and the issues written in the policy, by contacting different insurance companies.
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