It is a well-known fact that the concerns and responsibilities of a contractor are not limited to the fulfillment of the obligations to the public authorities (authorities in construction, social insurance institutions, labor protection etc.), subcontractors or suppliers, but they cover a wide range of concerns that are part of the construction activity.
Damage or failure of some construction operations on the job site, as well as accidents suffered by employees or third parties, can be the source of major difficulties. Many times, contractors must pay the price for accidental destruction, human errors and bad luck.
Construction insurance is a modern concept that helps eliminate this “burden” from a contractor`s shoulders. The most important thing to stay protected is to choose an adequate and complete insurance policy. Your insurance broker can help you make the right choice and will also manage the entire procedure: defining the parameters of the insurance and negotiating them with the insurance company, checking the insurance policy, following the contract and resolving potential problems.
What are the risks associated with construction activities?
It is known that the construction activity is a complicated and long lasting process, summing up numerous aspects: capital (financing), service provision (design – supervision – consulting), labor force, materials and equipment provided by the contractor and subcontractors. Inevitably, this complex process involves a series of potential risks that, if they materialize, can cause harm to the work itself, to third parties and to employees. Among the most common categories of risks, we mention:
- Risks related to design – supervision – consulting
- Risks related to unforeseen incidents (fire, flood etc.), unusual weather phenomena, natural disasters, sabotage etc.
- Accidents suffered by third parties or employees, during construction work
- Technological risks of construction, caused by design errors, poor execution or inadequate materials
Can the above risks be insured?
YES, through mandatory and optional construction insurance policies, chosen according to the complexity of the construction project. There are also specific policies that cover construction guarantees, for any damages caused by latent defects, which may occur during the first years after the completion of the works and the reception of the building.
When should insurance come into effect?
– When the contractor signs the contract, before starting the works on the construction site. Every contractor should take care of the insurance aspect, even if it is not written in the contract. The duration of insurance coverage for construction and professional liability must be extended for a certain period of time after the completion of the works.
How to proceed to insure construction works?
The procedure is similar to any other insurance contract, and has as a starting point the completion of the corresponding insurance application and the necessary information. You can get everything done with the help of a specialized insurance consultant or a broker. The latter, offering the guarantee of his/ her professional liability insurance, should be able to:
- provide accurate risk information
- negotiate the costs and analyze the insurance conditions
- deal with the effective settlement of any damages and compensation claims