TYPES OF INSURANCE COVER ON BUILDING PROJECTS

TYPES OF INSURANCE COVER ON BUILDING PROJECTS

The broad pattern of contracts with regard to injury is first to ensure that the insurance companies will compensate the indigenous construction companies, in respective of a wide range of injuries arising out of the progress of the works.

There are usually three main types of covers, which require to be taken by the insurance company to compensate the indigenous construction companies as far as insurance of new building project are concerned, these include:

a. Employers liability: other wise referred to as workmen compensation insurance. This type is design to protect the indigenous construction companies against injury to be sustained by the contractor employer on the works, out of or in the course of the employee appointment.

b. Public liability: this policy protect the indigenous construction companies and building owner from the legal liabilities, arising out of bodily injury to the third party (A person who is not building owner) as well as protection for loss of damage to the third party proposed for instance, business escaping from a construction site and causing bodily harm person’s, who are not employee or land owners or damages to an adjourning properties.

c. Insurance of the works: This policy is design to cover the cost arising from damage to or loss of a contract works, while the project is still under going construction that is before practical completion. The cost of consultant’s fee is usually also included in the value of the work to be insured. The essence of this is to ensure that, any fee paid to the consultant for redesigning or carrying out any duties in respect of the damage works are also borne by the insurance company in building contracts. The value of all unfixed materials and goods that have been brought into the site or its adjacent or property certified but off site are insurable, while the contractor’s plant and temporary building are excluded from this cover. The three types of insurance cover in building project are usually combined and referred to as a contractors all risk (C.A.R ) policy in the insurance market .