Contact us | +971 4 3635663
Sponsored by   Mudabala
 
 
BETA
Loading Loading ...
Sun, 08 Nov 2009 | 22:18 GMT
 

Construction insurance must for firms

Gulf News
 
 
06 September 2008
The GCC construction industry is booming, but it is a high risk industry. Many owners and contractors across the region are first timers in the industry, and are unsure of what comprehensive cover they need during the different phases of construction.

Owners need to realise the importance of a sound insurance strategy at the very beginning of the project. It minimises the possibility of potential gaps in coverage.

Given the several challenges that could arise during the building phase, developers should demand correct insurance cover from all the parties involved in the construction including contractors, sub-contractors and professional advisers. Contractors should opt to work with sub-contractors who have good loss records and a sound knowledge and understanding of the insurance protection that they purchase.

The primary "must have" cover for owners or contractors is 'Contractors All Risks' insurance - alternatively, it is possible to buy an 'Owners Controlled Insurance Programme'.

Accidents, including personal injuries and property damage, happen all the time, and they can cost the contractor a huge sum of money. These property damage claims are, or could be, covered by the (CAR) policy. The policies insure against physical damage to works, plant, equipment and materials during the course of construction. The CAR clause is not limited by reference to specified perils. Everything is covered unless it is excluded expressly or by implication.

The insured party in a CAR cover usually includes the employer, contractor, sub-contractors and suppliers. All internationally accepted forms of construction contracts state that the contractor will be contractually responsible for any accidental damage to the works, the very risk that CAR policies cover.

Negotiating a prime CAR contract is very important. Contractors are beginning to understand that CAR policies can be a source of revenue down the line, provided correct terms and conditions are in place.

Some key tips to negotiating a prime CAR contract include obtaining a policy in place for the project, having the contractor inspect a copy of the policy, ensuring the policy names the contractor and employer as insured. Additionally, it is important to check if the excesses and deduct-ibles are reasonable and that there are no unusual exclusions from coverage including broker and attorney review.

With Owners Controlled Insurance Programme (OCIP), the principal has the control over the selection of the insurers, excess and deductible levels and the scope of coverage. Also, the insurance is uniform for all parties, there is no possibility for gaps in insurance coverage that have been arranged by the various parties themselves and there are no contractor to contractor claims in respect of damage to each other's works.

OCIP has several advantages such as a more flexible approach from the insurers on the coverage and claims issues, a seamless transition of the project from construction phase to operational phase insurance covers among others.

Insurance for the core construction phase is arranged by the principal and covers the marine/contractor's all risks/third party liability and delay in start up. The contractor's plant and machinery, workmen's compensation, automobile and professional indemnity insurance are arranged by the contractor

- The writer is director of general insurance at Nexus, one of the region's leading financial advisers. Views expressed are the author's own and not necessarily reflect those of Gulf News. If you have questions, please email advice@gulfnews.com.

By Michael Walton

© Gulf News 2008

 
 
 
Community Comments (0) - Comment on this article
The opinions of the authors expressed herein do not necessarily state or reflect Zawya. Read our Comment Policy.
 
 
 
Loading ...
 
Report Abuse
Loading ...
 
 
Loading ...
Zawya Comment Policy:
 
  1. Zawya encourages you to add a comment to this discussion. You agree that when you add content to this discussion your comments will not:
    1.1   Contain any material which is libelous or defamatory of any person, is obscene, offensive, hateful or inflammatory or causes damage to the reputation of any person or organisation.
    1.2   Promote sexually explicit material, violence, discrimination based on race, sex, religion, nationality, disability, sexual orientation or age or any illegal activity.
    1.3   Be made in breach of any legal duty owed to a third party, such as a contractual duty or a duty of confidence.
    1.4   Be threatening, abuse or invade another's privacy, or cause annoyance, inconvenience or needless anxiety.
    1.5   Be used to impersonate any person, to misrepresent your identity or affiliation with any person, or be likely to deceive any person.
    1.6   Give the impression that they represent Zawya.
    1.7   Advocate, promote or assist any unlawful act such as (by way of example only) copyright infringement or computer misuse.
  2. The content posted on www.zawya.com is created by members of the public. The views expressed are theirs and unless specifically stated are not those of Zawya. Zawya reserves the right to review all comments prior to posting and edit or delete any contribution, but Zawya is not responsible for and can not be held liable for any content posted by members of the public on www.zawya.com.
  3. Zawya is not responsible for the availability or content of any third party sites that are accessible through www.zawya.com. Any links to third party websites from www.zawya.com do not amount to any endorsement of that site by Zawya and any use of that site by you is at your own risk.
  4. By submitting your comment, you hereby give Zawya the right, but not the obligation, to post, air, edit, exhibit, telecast, webcast, re-use, publish, reproduce, use, license, print, distribute or otherwise use your comments worldwide, in perpetuity.
 
 
 
 
 
 
 
Post Your Tender Notices for FREE
(No Sign-in Required)
 
 
Construction Tenders Due Date
CONSTRUCTION OF 32 HOUSING UNITS, MAJLIS AND MOSQUE AT AL-JARH & AL-AESI IN WILAYAT DIMA TAYIN, AL-SHARQIYA REGION - Ministry of Housing 07Dec09
SALE OF ORDINARY PORTLAND CEMENT 42.5 R/N 31Dec09
SALE OF ORDINARY PORTLAND CEMENT 42.5 R/N 31Dec09
Construction, Completion and Maintenance of Transport Battalion Building to Expand National Headquarters - NATIONAL GUARD HEADQUARTERS 01Dec09
Construction of parks and playgrounds at Al Rayyan - M. Municipal Affairs & Agriculture 23Nov09
Preparation and Provision of Meals for Primary School Students - MINISTRY OF EDUCATION 17Nov09
Supply of Office Furniture, Carpet and Curtains for Ministry of Finance 13Dec09
Construction, Completion and Maintenance of Crosses on Main Roads 7th and 6th Ring Motorways Leading to New Residential Areas _ West Jleeb Shuyoukh Nos. (ICI,11 (MPW55) - MINISTRY OF PUBLIC WORKS 13Dec09
Construction of parks, playgrounds and plaza at Um Salal pakage 1- M. Municipal Affairs & Agriculture 23Nov09
Construction, Completion & Maintenance of Secondary School for Boys at Oqaila Block 3. - MINISTRY OF PUBLIC WORKS 28Nov09
Supply and Furnishing of Library at Higher Institute For Communication and Navigation (New Building) Boys + Girls - PUBLIC AUTHORITY FOR APPLIED EDUCATION AND TRAINING 17Nov09
Design, Supply & Installation of Distilled Water Treatment Unit at Doha Eastern Power & Water Distillation Station - MINISTRY OF ELECTRICITY & WATER 15Dec09
Construction, Completion and Maintenance of al Khor Hospital Medical Training Center BA/09-10/C/003/G 10Nov09
SEWAGE TREATMENT PLANT AND SEWERAGE NETWORK SYSTEM FOR MISFAT AL ABREAN WILAYAT AL HAMRA - Ministry of Regional Municipalities & water Resources 30Nov09
Design and Implementation of Replacement, Dismantling, Demolition, Supply, Installation and Maintenance of A/C Machines and Devices at Abdul Aziz Al Khateeb Hall at Al Arabi Club and Games Hall at Kuwait Sports Club - PUBLIC AUTHORITY FOR YOUTH AND SPORTS 06Dec09
Maintenance of Transformers Tension Exchangers for Main Transformer Stations of High Voltage - MINISTRY OF ELECTRICITY & WATER 22Nov09
Tenders Construction of Ain Sinan public park - M. Municipal Affairs & Agriculture 23Nov09
Training in Export Department 11Nov09
Maintenance Works for Facilities and Services & Minor Construction Works for Authority Various Facilities (Southern Area) - PUBLIC AUTHORITY FOR AGRICULTURE AFFAIRS AND FISH RESOURCES 20Dec09
Maintenance, Installation and Operation of Mechanical Equipments, Firefighting Networks & Discharge Water Treatment Plant and Minor Metal Constructions for Authority - PUBLIC AUTHORITY FOR INDUSTRY 06Dec09
 »  More Tenders
 
 
 
Community Buzz

Stories

Companies

Most viewed companies by Community in the last 24 hrs
Company Name Country Industry
Consolidated Contractors Company Overseas Construction and Design
Saudi Binladin Group Saudi Arabia Construction and Design
Saudi Telecom Saudi Arabia Telecommunications Services
Saudi Electricity Company Saudi Arabia Electric Utilities
Emirates Aluminium Company UAE Metal Production
Sharjah Electricity and Water Authority UAE Electric Utilities
Emirates Telecommunications Corporation UAE Telecommunications Services
Al Azizia Panda United Company Saudi Arabia General Retailers
Commercial International Bank (Egypt) Egypt Banking
Dodsal Engineering and Construction UAE Construction and Design
 

Projects

Most viewed projects by Community in the last 24 hrs
Project Name Country Sector
Takreer - Ruwais Refinery Expansion UAE Oil and Gas
Al Futtaim Carillion - Marina Hotel (Yas Island) UAE Real Estate
Emirates Aluminium (EMAL) - Smelter Complex - Phase 1 UAE Industry
Abu Dhabi DOT - Abu Dhabi Metro UAE Infrastructure
ENEC - Nuclear Power Plant UAE Power and Water
SATORP - Jubail Refinery and Petrochemical Complex Saudi Arabia Oil and Gas
Dubai RTA - Dubai Metro UAE Infrastructure
Al Safwa - Jeddah Cement Plant Saudi Arabia Industry
Qatar Bahrain Causeway Foundation - Qatar Bahrain Causeway Bahrain Infrastructure
Qatar Bahrain Causeway Foundation - Qatar Bahrain Causeway Qatar Infrastructure
 

Blogs

 
 

 
 
 
 
 

Site is optimised for viewing at 1024 x 768 with Internet Explorer v6 and Firefox v3.0 and above.
Copyright © 2009 ABQ Zawya Ltd. All rights reserved. Please read our Membership Agreement