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CONSTRUCTION ALL RISK INSURANCE (CAR) (GENERAL EXCLUSIONS & EXCLUSIONS…
CONSTRUCTION ALL RISK INSURANCE (CAR)
DEFINITION
Any risk that involve material damage will be covered
exist to insured building/ project under construction against cost of repair or replacement in the event of accident
designed to protect owners and contractors from the devastating impact of the insured peril to a construction project.
SCOPE OF COVER
Insured perils
Fire
Explosion
Theft
Excluded Perils
Loss or damage due to willful
misconduct
Loss or damage due to faulty
design
Cessation of work, partial or total
Deductible as mentioned in the
policy document
PARTIES TO CONSTRUCTION CONTRACT
Insured
Contractor
master servant relationship
If there are any damages to the building caused by the servant, master is answerable for any wrongful act of his servant.
Master: Contractor
Servant: Sub-contractor
CAR ADVANTAGE
construction activities
surrounding properties
flexible premium payment
sum insured ( not less than total value)
SECTION I: MATERIAL DAMAGE COVER
Covers any foreseen & sudden physical loss or damage from any cause
example: contract work
professional fees
free issues materials
construction equipment
Insured Perils must present during event occur
Additional Perils
faulty design deductible
SECTION II: THIRD PARTY
Someone who might get into accident at construction site such as client
Claims
Exclusions
excess stated
GENERAL EXCLUSIONS & EXCLUSIONS FOR MATERIAL DAMAGE COVER
stated in policy but will not be covered
GENERAL EXCLUSIONS
war
nuclear radiation
willful act/ negligence of the insured
cessation of work whether total or partial
Terrorism damage exclusion warranty
exclusions material damage cover
material used during construction
cement, blocks, etc
company shall not be liable:
loss discovered only at the time of taking an inventory
normal wear & tear-due to atmospheric conditions
loss or damage to faulty design
cost for rectification or correction of any error during construction
loss of damage to files, drawing account bills, currency etc
damage/penalties on account of the insured's non-fulfillment of the terms of delivery or completion
CLAUSE
DEPENDENT CLAUSES
cannot stand on its own because not contain information in the sentences
Limitations Clauses
one of the contracting parties limits their liability to agreed figure to the value of contract itself
against drawee
Indemnity Clauses
agrees to indemnify
Exclusions Clauses
LIMIT OF INDEMNITY
max amount which on insurer will pay
SUM INSURED
basis of nature of project
tenure of project
voluntary excess opted by policy holder
MODE OF PAYMENT
cash
replacement
repair
reinstatement
MAINTENANCE PERIOD
after completion of a contract which contractor is required to make good at his own expense, any work which needs repair
Extension Period- Section 1
notwithstanding any date to contrary
extra charges for overtime, night work, work on public