INSURANCE CLAIMS

CLAIMS

Claims can be define as the assertion of a right or a policy of assurance when the event insured against happens. A claim in construction contract may arise from measurement, quantities, rates, delays and disruption or a combination of these. Aswo (1998) sees claim as contractually extra-contractual or ex-gratia. Contractual claims are found in the clause of the contract and an adjudication name there in.

Extra-contractual claims is said to arise when the contract makes no specific provision for the basis of the claiming such situation, redress is sought in common law of equity, therefore adjudication is rested in the court only. x-gratia claim arise in situation where there is no ground for redress in the contract or common law, it is said to be sympathetic claim, which the public authority never honour. Chejina (1995).

This means that the exact amount of the compensation is not known before the loss occurs .however, in property insurance, the general rule is that the measure of indemnity in respect of the loss of any property is determine but by its cost, by its value at the date of the loss and at the place of the loss.

SETTLING OF INSURANCE CLAIMS

The greatest single features of insurance scheme as far as the insured is concern is the claims service provided, claims settlement therefore, form one of the major aspect of insurance in construction, if claims are delayed or withheld without satisfactory reasons, the indigenous construction companies will lose confidence in the insurer concern (Liyadu 1985).

In other to improve the conditions in claim settlement, the indigenous construction companies should be educated on the normal procedure in claims settlement. And as for other parties, there should be compromise and prompt attention from all parties concern in the claims settlement, these include the insurer, the third parties, police, surveyors, engineers, expert loss adjusters and repairers.

The insured may submit his claims personally or through a fully authorized agent acting on his behalf such as his insurance broker.

Because of some special circumstances surrounding existing works such as

• The complexity and size of many construction projects.
• The frequencies of losses, large number of collaborating parties with potentially conflicting interest, the difficulty with some of the problem that may arise, these difficulties demand a special claim procedure as such a building insurance claim normally follow a patterned procedure as follows

1. Notification: As in other classes of insurance, the policy conditions require the insured to inform the insurers immediately in written upon having knowledge of any event that may give rise to a claim. This is so important that nearly every insurance policy will require notification within stipulated period.
2. Particulars and proof of loss: The duty of providing full particulars and proof of loss is the insured obligation, he is to provide the insurers prompt and full information about any accident and its circumstances, if possible he should provide photographic evidence and damage part should be retained for subsequent inspection if required.
3. Investigation: if need be an adjuster or team of experts (quantity surveyor, engineers and architect) will be appointed to make any further enquiries that may be needed to establish the facts and circumstances not known to the insured and insurer. The team will then submit its report and recommendation on which the insure bases his final decision on awards.
4. Payment and method of settlement: In other classes of insurance, payment is required to be effected within three month either by cash, replacement repair but in case of construction (building insurance),it is often not possible to effect full payment within three months, as a replacement or repair of a collapse building may need a period of time more than three months.

To effect payment in construction insurance, there is often a provision in the condition of contract as to the method of payment for example in the JCT form of contract clause 20 (a)

(2) Made a provision for the payment of contractor to be installments made under certificate of the architect issued at the period of interim certificates name in the conditions of contract. The final stage of claim settlement is marked with the filling of “settlement of claims are properly made and followed up, it is advisable that contractors keep a file of report and claim