Construction all risk insurance policy provides coverage for engineering works such as the construction of residential buildings, commercial buildings, factory, roads, waterways, drainage scheme, sewage works, bridge etc. The policy document of this insurance states the steps that the insured needs to follow in the event of any loss or damage. Following are the steps that the insured must follow:

Immediately notify the insurance company:

The insured must immediately notify the insurers on the happening of any damage which can give rise to a claim under the policy. The insurers/insurance company can be notified immediately either through a broker or telephone or telegram. It is important to notify the insurance company within a stipulated time-frame (days) given in the policy document of the construction all risk insurance policy.

Provide a written notification:

The insurance company should be given a written notification by the insured regarding the event of loss or damage. This written notification should include the nature or the extent of the loss/damage caused to the property.

Minimize the loss as much as possible:

It is important that the insured takes all the necessary steps required to minimize the further loss. He can take the steps which are within his power to minimize the extent of loss or damage.

Inform the Police authority:

In case of damage or loss caused due to the theft or burglary, the insured must immediately inform the police authority about the same.

Preserve the affected parts/property:

In the event of the occurrence, the insurance company sends a representative or surveyor to inspect the situation. Hence, the insured must make sure that affected parts/property are preserved so that they can be made available for inspection.

Extend full cooperation to the surveyor:

The insured must extend his full cooperation to the appointed surveyor for the investigation process. The insured must provide the surveyor with all the information and documentary evidence required.

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Submit the claim form to the insurance company:

The insured must properly fill the claim form and submit the same to the insurance company. The claim form must contain all the required information which is true. The insured will have to provide the following information in the claim form:

  • Date and time of occurrence
  • Details of damage to the contract works, construction plant and equipment, property belonging to the third-party if any
  • Probable cause of the damage
  • Progress of the construction during the time of damage
  • Details regarding the repairs of the damaged items
  • Damage to the surrounding property if any
  • Estimated cost of repairs to the damage caused to the contract works, construction plant and equipment, property belonging to the third-party, owner’s surrounding property
  • Further remarks if any

All the necessary documents should be submitted along with the claim to verify the financial loss suffered due to the loss or damage.

Case Study:

Y.R Constructions was in the business since last one decade and had completed many residential as well as commercial construction projects in various parts of Maharashtra and Gujarat. While completing its one of the residential project in Jamnagar, a machinery caught fire due to short-circuit. The fire was so ferocious that the machinery was completely burnt and damaged beyond repairs.

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The fire caused loss of Rs 7 lakhs as the entire machinery was damaged beyond repairs. Y.R Construction had a construction all risk insurance policy, and they immediately approached their insurance company to file a claim. Following were the steps taken by the company:

  • A written notification was sent to the insurer stating the cause of the loss.
  • A surveyor was then sent by the insurance company to calculate the extent of the loss.
  • The surveyor found that the machinery had completely damaged due to the fire and it was not possible to restore it to its previous state.
  • The construction company also submitted a proper claim form containing all the required information.
  • All the necessary documents were also attached to the claim form.

Since Y.R constructions had properly adhered to the claim process, the insurer agreed to settle the claim.