Contractors and built environment professionals need to take out the correct and adequate insurance for building projects, advises Uwe Putlitz, CEO of the Joint Building Contracts Committee (JBCC). But what types of insurable risk applies to construction projects?
Generally, these five types of risk apply:
1. Contract Works Insurance (CWI) deals with the whole works during the construction period including plant and materials, work by specialist contractors, and additional professional fees where damage to the works occurs;
2. Supplementary Insurance (SI): this type of insurance covers expenses or losses that are caused by events outside the normal control of the parties, including civil commotion, riots, strike action etc. not included in the CWI policy. SI can be obtained from the South African Special Risks Insurance Association (SASRIA) in South Africa, or the Namibian Special Risks Insurance Association (NASRIA) in Namibia. SI is not available to the public and needs to be arranged by a broker;
3. Public Liability Insurance (PLI): in the event of a death or injury to any person and or accidental loss or physical damage to tangible property, this type of insurance will provide indemnity;
4. Removal of Lateral Support Insurance (RLSI): if the execution of the work causes weakening or damage or interference with the support of land or property on site or adjacent to the site and the consequences thereof, then this type of insurance will apply;
5. Other Insurances (OI) applies to cover risks in transit of goods imported from overseas specifically for installation in a project.
The Contract Works Insurance that includes the work of all subcontractors must be specified, listing the various subcontract trades by name and including the subcontract tender amount of each subcontractor. Where a subcontractor is required to procure equipment from overseas, this must be insured separately by the subcontractor as ‘marine insurance’. Also, subcontractors must have their own Public Liability Insurance, even if the employer and the contractor have such cover.
For more information, contact the JBCC on Tel: +27 (11) 482 3102 or via www.jbcc.co.za.
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