INSURANCE AND BONDS 🔥 
- INTRODUCTION
When employers and contractors enter into construction contracts, they are basically taking risks
THUS, taking insurance is an important part of the provisions (peruntukan) in construction contracts
- IMPORTANCE OF INSURANCE
Construction works are full of risks
INSURANCE DEFINITION
“A contract of insurance is any contract whereby one party assumes the risk of an uncertain event which is not within his control, happening at a future time, in which event the other party has an interest, and the first party is bound to pay money if the uncertain event occurs
One of the primary functions of a contract is to distribute risks
The construction contracts contain express and implied terms distributing risks to the contracting parties
In relation to risks imposed on contractors, the contracts require them to provide insurance coverage
an important policy to have if you own, run or manage a construction site
CONTRACTS PROVIDE
provides safeguards for you as an employer against your construction workers being injured on site
Construction insurance does not exempt you from maintain a safe workplace, BUT
Usually, construction insurance policies only pay out if a strict set of health and safety guidelines are followed
Construction insurance also covers materials and machinery on the construction site
accidents
fire
theft
BECAUSE the theft of building materials is getting more commonplace
Considering the fickle nature of the construction industry, insurance can be comprehensive and cover a multitude of possible problems
The cost of solving these problems is normally many times the cost of the insurance premium. This is why construction insurance is an essential part of a construction budget.
- WHO NEEDS INSURANCE
B) builder,
C) contractor,
A) construction company or construction manager
- What typically does a construction insurance policy cover?
A) basic level
construction insurance covers all construction equipment and property in the case of accidental damage, theft and weather.
B) workers on the construction site
full liability covering medical and legal costs and subsequent workers compensation is also covered
- How much construction insurance typically cost?
The size of the percentage is wholly dependant to the scope of the project at hand.
a small house may be around 1% of your total cover whereas a high rise block may be over 5%
- What typically does a construction insurance policy not cover?
he transportation of building materials from warehouse to building site is not normally covered but some of the better insurers are now covering this as standard.
Construction insurance does not cover any extra costs incurred due to delayed completion of the project regardless of the reason for delay.
- Type of insurance
A) Liability insurance policy
B) Loss insurance policy
The insurer undertakes that, if the insured becomes liable to some one else, the insurer will indemnify the insured.
Similar to ‘third party’ motor insurance policy
public liabilities policy for contractors
professional indemnity policy for consultants
Insured person is entitled to be compensated by the insurer for loss or damage suffered whether caused by accident or negligent.
A loss insurance policy provides cover, not for a person’s legal liability to others, but for losses which fall directly upon that person
In construction, such cover is required by a client on whom the contact places of risk of damage to the contract works
Contractor s’ all risks policy