Builder's risk insurance. Building & installation works insurance. Liability insurance.

We believe that construction projects insurance is one of the most difficult and, if appropriate, creative types of insurance. It isn't developed enough in Russia - many constructions dispense with full insurance and use only compulsory types of it, or save on insurance. Full coverage is a custom for foreign builders (especially Turkish), big Russian companies and state companies who are builders and building owners. Major part of constructors use insurance selectively, first of all through self-regulatory organizations.

Requirements of builder’s risk coverage are usually provided by construction agreement.

SEVERAL INTERESTED PARTIES - PARTICIPANTS OF CONSTRUCTION PROJECT CAN BE PARTIES TO BUILDING  & INSTALLATION WORKS INSURANCE POLICY:

• Building owner;
• Investor (can be the same as building owner);
• Lending bank;
• General contractor;
• Subcontractors;
• Designer.

Basically,  general contractor should be the main insured, because he is constructing, is liable for the damages to the building while it is under construction and bears losses in case of insured accidents.

OBJECTS OF BUILDER'S RISK INSURANCE:

The specific feature of builder's risk insurance is that all property interests on construction site during construction period are objects of insurance:

• Building, installation and commissioning works;
• Post-construction indemnities - this means liability for damages which can be caused to a finished object  during the period of guarantees (the period is usually from 12 to 60 months);
• Liability during building and installation works;
• Materials for construction;
• Installation equipment;
• Construction machinery - mobile and stationary;
• Real estate which is already on construction site;
• Temporary establishments (such as living areas for construction workers; warehouses to store materials).

Regardless of stage of usage everything on construction site can be insured object. For example, materials for construction are shipped, unloaded and stored in warehouse at first. Then they are used for construction and become a part of a project under construction. On all these stages they are insured.

INSURABLE RISKS & STRUCTURE OF BUILDER'S RISK COVERAGE:

• Building and installation works insurance;
  We provide building and installation works insurance on against all risks basis (AR). Among other things it includes a very important risk of personnel errors during building and installation works (indemnity from construction workers mistakes). Besides that we can point out at risks of damages caused by construction machinery to partially constructed building, collision or overturning of machinery, flooding of excavation because of raining,
• Insurance of liability during building and installation works;
  Third party liability insurance protects from damages of neighboring buildings, structures and utility systems. According to practice subcontractors are considered to be third parties too and the damages caused by subcontractors to each other are also compensated. Liability insurance during building and installation works is based on classic liability insurance rules of recovering damages caused to life, health and property of third parties. Thus it includes any damage caused to third as a result of construction project execution.
• Insurance of post-construction indemnities (supplementary building and installation works insurance);
  Insurance of post-construction indemnities refunds the cost of repairing or replacing sections of the objects due to defects or damages found out or showed up after building and installation works are finished. This risk is especially serious in industrial construction, when during the guarantee period tests of installed equipment are made.
• Construction machinery insurance;
  Construction machinery coverage protects machinery on construction site against theft and damages, blockage, flooding and fire.
• Liability insurance through self-regulatory organizations.
  Liability insurance through self-regulatory organizations recovers damages caused by errors of design, choice of materials for construction, showed up during construction and post-construction guarantee period.

SUMS INSURED & LIMITS OF LIABILITY IN BUILDER'S RISK INSURANCE:

The main sum insured in builder's risk policy is the cost of construction agreement. This means the cost of finished object excluding the cost of land parcel but including cost of building and installation works, design, materials and installed equipment (with shipping costs).

In liability insurance the sum insured is determined by requirements of customer or by estimating real risks on the basis of maximum loss for appropriate construction volume.

COST OF BUILDING AND INSTALLATION WORKS INSURANCE DEPENDS ON:

• Sum insured;
• Coverage;
• Construction period. The policy is concluded not for one year but for all period of construction which can last from a half of a year up to 10 years;
• Construction complexity. High-rise, underground, and especially underwater and on-shore construction projects are the most complicated and riskful.  Industrial construction is always more difficult and risky then civil one (house or office building)
• Builder's experience and image. It's a judgmental factor but there it plays a part.

BUILDER'S RISK REINSURANCE:

Builder's risk insurance is strictly continental. The main leader there is Munich Re Group, the world largest reinsurance company. Insurers generally follow Munich Re endorsements.

Builder's risk insurance is one of the strongest areas of our activity. We work with building companies from all Russia and are experienced in insuring and reinsuring construction projects of any type and complexity. When needed we cooperate successfully with building owners, builders, creditors/investors and state control authorities.

Contact us for commercial proposal on construction all risks insurance!