A contractor’s all risk insurance policy plays an important role by shielding you against losses or damages which may arise at the construction site. Here are some of the additional benefits which you can get added to your contractor’s all risk insurance policy=
- Cover for air freight= A policyholder can get the expenses incurred on air freight. It means, whatever expenditure is incurred by the policyholder in transporting goods via air, that would be reimbursed by the insurer.
- Custom duty= Any amount paid by the policyholder on a custom duty is covered by the insurer if the former submits the claim regarding that.
- Reinstatement of the indemnity limit= A construction all risk insurance policyholder can go for the reinstatement of the indemnity limit when the claim has occurred after the policy date in case of overtime, express freight, surrounding the property, etc.
- Cost of removal of debris= After a loss happens, a policyholder would have to bear the amount to remove the debris on the site. However, the policyholder can get an extra benefit by getting a cover for removal of debris. It means, the expenses incurred by the policyholder on removing of debris would be covered by the insurance company.
- Owner’s surrounding property= In most of the cases, the construction all risk insurance policy covers losses or damages happen at the insured premise. However, the policyholder can get an extra coverage to cover the surrounding property as well. It means, that property where the construction work is not going on, however, it surrounds the insured premise and is the property of the policyholder, it will be covered by the insurer.
- Third-party liability= Some construction all risk insurance policies don’t cover loss or damage caused to the third-party. However, the policyholder can go for the extra third-party liability cover and ask the insurer to cover loss or damage caused to the third-party as well. It means the insurer would cover the legal liability falling on the policyholder due to bodily injury or property loss suffered by the third party.
Further, the policyholder can expand its construction all risk insurance policy and get terrorism, escalation and earthquake covered under contractor all risk insurance policy.
Here it is important to note, for every extra cover, you would have to pay an additional premium to the construction all risk insurance company.
From the last five years, J.K Construction has established itself as a leading construction company in Mumbai. Since its inception, the company has successfully completed all its construction projects. While the company takes every step to ensure the complete safety, it has also purchased contractor’s all risk insurance policy.
Last year, J.K Construction got a contract of constructing a two-story office building in Pune. As the building site was near the company’s warehouse, it was confident to complete the project on time. However, a fire started in the warehouse due to short-circuit in machinery and damaged both the goods and the nearby warehouse.
Thankfully, no one was physically injured, however, there was a material loss of Rs 10 lakh along with the damages to the warehouse. In this case, J.K Construction had purchased a contractor’s all risk insurance policy and thus, approached the insurer for the claim settlement. J.K Construction had paid an extra premium to expand the policy cover to the surrounding property as well. As the warehouse had also suffered losses or damages, the insurer settled the claim with regard to that as well.
Here, J.K Construction had paid extra to insure the surrounding structure and its sum insured was also mentioned separately in the policy. The insurer asked for the required documents and agreed to settle the claim after inspecting the construction site and the warehouse.
L.N Construction got a major contract of constructing a road in Iraq. Considering the scenario in the country, the company decided to buy contractor’s all risk insurance policy to get the coverage in case of any loss or damage. It paid an extra premium to get terrorism cover as well.
When the construction was still underway, it faced the brunt of terrorists who attacked and damaged it. Here, the company had a construction all risk insurance policy and therefore, it approached the insurer for the claim settlement.
As the insurance policy covered terrorism as well, the insurer surveyed the site and computed loss, and settled the claim accordingly. Without terrorism cover, L.N Construction would have to bear the entire losses or damages by own.