Download Property Insurance on Project During Construction

Contract Insurance
Requirements
Contract Insurance
Requirements
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The contract will specify insurance requirements to
protect owner.
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Contractor is responsible for obtaining insurance for protection from
liability caused by construction operations.
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It is not economical to buy all insurance coverages available for a particular project.
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Contractor must evaluate the probability of liability occurrences and compare to cost of
premium.
Property Insurance on Project
During Construction
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All Risk Builder’s Risk Insurance - Covers loss or damage to the
project and materials caused by external effects.
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Named-peril Builder’s Risk Insurance – Covers loss or damage to
project/materials due to fire or lightening. Several
endorsements can be added on:
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Windstorm, hail, explosion, riot, civil commotion,
Aircraft, vehicles and smoke
Vandalism and malicious mischief
Water damage
Property Insurance on Project
During Construction: Specific Loss
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Earthquake Insurance
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Bridge Insurance :
 For bridge projects. Loss due to fire, lightning, flood, ice, collision,
explosion, riot, vandalism, wind, tornado and earthquake.
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Installation Floater:
 Covers expensive mechanical equipment from the time it leaves the place of
shipment until it is installed on the project.
 This will take care of damage or loss to equipment either during transport
and/or storage.
Property Insurance on Contractor’s Own
Property
It is wise for the contractor to insure his/her own property
utilized on a project:
Property Insurance on Contractor Buildings:
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Buildings, sheds, warehouses, trailers and personal property
contained therein.
Contractor’s Equipment Insurance:
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Backhoes, loaders, etc.
Motor Truck Cargo Policy:
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Covers loss of materials or supplies while being transported in
contractor’s vehicles.
Property Insurance on Contractor’s Own
Property
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Fidelity Bond:
 Protects contractor against loss due to employee dishonesty.
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Crime Insurance:
 Protects contractor against loss of money, securities, equipment
and valuables through burglary, theft, robbery, destruction or
disappearance.
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Valuable Papers Destruction Insurance:
 Covers loss of books, records, deeds, maps, mortgages, contracts
etc., except by misplacement, unexplained disappearance, wear
and tear, deterioration, vermin or war.
Liability Insurances
Of particular importance is obtaining insurance in case of
injury or loss for which Contractor may be held liable.
Contractor’s Public Liability and Property Damage
Insurance:
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Protects contractor in case of injuries to persons other than
employees, and also property of others.
Completed Operations Liability:
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This insurance protects contractor from claims that arise from
faulty performance on projects already completed and handed
over to the owner
Liability Insurances
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Professional Liability Insurance:
• Provides coverage to the contractor against claims that arise out of design
and other professional services rendered by the contractor or owner.
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Worker’s Compensation Insurance:
• provides wage replacement and medical benefits to employees injured in
the course of employment in exchange for mandatory relinquishment of
the employee's right to sue his or her employer.
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Employer’s Liability Insurance:
• Covers bodily injury or death of an employee in the course of employment
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Owner’s Protective Liability Insurance:
• Protects owner from liability for damages arising from the operations of
the prime contractor or subcontractors.
Term: Subrogation
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Subrogation allows an insurance company to sue a responsible party
for damages.
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If owner provides Builder’s Risk Insurance, insurance company can
seek satisfaction from contractor or subs.
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To avoid this, name owner, contractor and subs as insureds on the
same policy.
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Another means of avoiding litigation among the parties due to loss is
by all parties waiving all rights against each other.