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Is your insurance tailor-made to your requirements?

3rd May 2023

     

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By George Jennings & Kobus van Niekerk

When standard does not make the grade

Most, if not all policy wordings are offered in a standard format. Such a wording may not meet all the requirements of the risk profile of the proposer or the insured and may lead to disappointment and or aggravation should a claim be declined, or only partially paid.

Consort understands and appreciates that the market segment of contractors has its own requirements. The ‘conventional or standard’ policy wording should be enhanced to protect the contractor against such risks which are unique to their sphere of activities.

Some specific contracts may call for particular insurance requirements and conditions.

Main risk classes in engineering insurance

The two main classes of risk in the engineering insurance market which we wish to highlight are Contractors All Risks (CAR) insurance and Plant All Risks (PAR) insurance.

Contractors All Risks insurance is intended to provide indemnity for the construction of small, medium and large buildings, civil as well as engineering projects, and must be structured to cater for the size and complexity of such small, medium and large developments.

Plant All Risks insurance relates not only to construction plant and equipment but, for instance, also includes plant and equipment in use in the under-ground and opencast mining industries. Some of these plant and equipment can carry a significant price tag when it comes to the total value at risk.

Contractors All Risks insurance

Whilst alterations and additions to an existing private dwelling structure may appear to be a very ‘simple and straight forward’ operation, you need to take into consideration that the contractor may cause damage to the existing structure or adjacent property or structure. The adjacent property or structure should not be confused with ‘surrounding property’.

Furthermore, consider a contract for an intersection requiring various bridges, with major earthworks, concrete and roadworks on a highway that may take five years to complete - although the same cover is required, a bespoke policy wording will be a necessity.

Consort has the specialist technical insurance knowledge, skills and the wordings to tailor-make your policy in line with the contract conditions and to protect all interested parties in the project.

Plant All Risks insurance

The  value of some of the opencast mining equipment such as a dragline may exceed R1 billion. This high valued equipment requires specialist underwriting considering that the Plant All Risks policy also includes loss or damage sustained whilst the plant is operating as a tool of trade.

Likewise, underground equipment such as tunnel boring machines and automatic mining machines are also high valued equipment working underground in confined conditions where fire and natural disasters are a reality. A standard Plant All Risks insurance policy may not be sufficient.

The same applies to high-rise buildings which need high rising plant where wind and collapse are always an issue.

Plant hirers and hired-in plant also need consideration to ensure that the insurance is geared around and complies with the conditions of hire between the parties. Whilst plant hire operators have formulated well-known and accepted conditions of hire, unfortunately, many other wordings are also in use of which the broker and underwriter should be aware.

Good policy wordings are worth more

Consort Technical Underwriters has developed a bouquet of wordings based on tried and tested policy wordings. These are adaptable by means of extensions and endorsements, to accommodate the insurance requirements of all established and recognised contract condition wordings utilised in the construction industry.

We are also able to insure certain advanced consequential losses and or delay in start-up exposures following an indemnifiable material damage claim.

Tailoring your insurance needs make all the difference

Consort also wishes to emphasise that it is in the insured’s own interest as well as that of the broker, to disclose to the insurer all information regarding the proposer’s activities, nature of the contract/s as well as the usage of the plant to be insured.

Even better still is to complete the underwriter’s appropriate Proposal Form. Whilst the Proposal Form is not a formal binding agreement to conclude the insurance, with all the information at hand, the underwriter can make a more informed decision and in accordance, issue a bespoke policy.

Please contact your Broker directly to approach Consort in assisting with your requirements.

Consort Technical Underwriting Managers (Pty) Ltd (FSP 2273) underwritten by Lombard Insurance Company Limited (FSP 1596) an Insurer licensed to conduct non-life insurance business. 

Edited by Creamer Media Reporter

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