Your ultimate construction all risk insurance guide
Are you worrying about the safety of your construction site? What would happen if your half-constructed building catches fire or there is vandalism? Does the thought of stolen construction equipment is enough to press a panic button?
You are not the one who is fretting over the safety of the construction site. In fact, the construction site is vulnerable to various kinds of risks and perils. Last month, three labourers lost their lives when they fell off an under construction building in Pune, Maharashtra.
While you should always take enough steps to prevent the loss from occurring, many times accidents become inevitable. Then there are natural calamities, like earthquake, fire, flood, etc.; which are beyond anyone’s control.
Here a construction all risk insurance policy can go a long way in securing you against various losses or damages.
Let’s know everything about construction all risk insurance policy:
What is Construction All Risk Insurance Policy?
An essential part of property insurance policy, construction all risk insurance policy is meant to offer coverage to buildings under renovation and construction. The construction all risk insurance policy plays a crucial role in transferring the risks of a policyholder to the insurer.
Thanks to construction all risk insurance policy, it is feasible to secure the structure, raw materials and workers who are present on the site. While, the standard policy offers extensive coverage against perils like lightning, explosion, etc.; you can go for add-on covers like terrorism, cost of removal of debris, escalation, express freight, etc.
Further, the policy also covers liability which may arise from losses or damages caused to the policyholder’s surrounding property due to construction activities carried out on your site.
It is interesting to note, that when the other insurance policies have a tenure of one year, in construction all risk insurance policy, the tenure of coverage is equivalent to the period of the construction. It means, the coverage would start from the day of unloading of the first batch of the material at the construction site and expires on the date the work is handed over to the principal.
How Can Construction All Risk Insurance Help You?
There are the following benefits which you can enjoy from construction all risk insurance policy-
• A construction all risk insurance policy can ensure the financial security of your business as it compensates you for any losses or damages which may arise from the insured peril. The insurer will make a payout for any structural damages, or material loss
• As per the requirement, you can expand your construction all risk insurance policy and seek additional covers like third-party liability, surrounding the property, air freight & express freight, additional customs duty, debris removal, etc. Note, you would have to pay an extra amount to get additional cover.
• There is no one-size-fits insurance policy as you can customize it by including extra coverages as per your needs. Either you can approach the insurer directly or take the help of corporate insurance advisors, like SecureNow, who would help you in deciding the right type of policy for you.
• The policy offers comprehensive cover and can be taken by principal, contractor, sub-contractor, jointly or individually.
• In many cases, construction all risk insurance policy can be a prerequisite for a bank loan to purchase the property. It means, by buying the insurance policy, it is feasible to improve your credibility and increase your chances of getting a loan.
• Any loss or damage to the property or third-party can lead to disputes, and a case may be filed against you. Construction all risk insurance policy can play a crucial role in helping you solve disputes. In case the verdict goes against you, the policy will offer compensation to the injured party on your behalf.
How Would the Premium be Determined?
During the construction all risk insurance policy, the insurers consider the intricacies involved in each construction project while deciding the premium amount. Some of the factors which can play an important role in computing the premium of construction all risk policy is:
• Cost of project
• Sum insured
• Nature of the project
• Tenure of the project
• Geographical location
A construction all risk insurance policy can play an imperative role by covering you against a myriad of risks. But before you buy the policy, it is necessary to pay attention to certain issues like coverage period, types of insurable items, etc.; to ensure you choose the right cover.