INTRODUCTION
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Construction contractors
Contractors may have many of the following characteristics:
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New and untrained employees.
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Many work sites.
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High-value, mobile equipment.
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Outdoor work, with consequent
susceptibility to weather and theft.
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Use of hazardous equipment under
ever-changing conditions.
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Difficult-to-predict conditions of ground,
weather, internal building components, and labor supply.
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Time-sensitive work, susceptible to
strikes, subcontractor failure, and other delays.
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Workers mingling with those of other
firms, making it hard to control the work environment.
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Vulnerability to financial markets.
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Operations in foreign countries and the
associated political risks.
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Design build operations and the associated
risks.
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Various types of construction contract
from
standard to manuscript.
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Joint Ventures
These conditions pose a special challenge to the risk manager to:
(1) be
closely involved in early project planning, and;
(2) be on work sites
frequently to be aware of field conditions.
Construction insurance policies must be specially designed to respond to
the particular circumstances. Some of the types of policy and bond
are as follows:
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Standard property and casualty policies to
cover the fixed office and plant operations.
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Contractor Equipment Floater.
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Builder risk / Course of construction /
Business Interruption / Delay.
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Wrap-up liability - comes in various
forms, some of which are not really wrap-up.
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Workers Comp.
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Decennial Liability - A form of
products-completed operations insurance sometimes required of
contractors doing work in a foreign country. It provides ten years of
coverage to the owner of a construction project for repair or
replacement costs in the event of a complete or partial collapse.
(Decennial means lasting ten years or occurring every ten years.).
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Various types of surety bond.
Contractors and Subcontractors. A blanket sub-contactors policy
(Subcon) is now available, which removes the necessity of separate
bonds for each sub - A type of finite risk insurance.
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Crime / employee theft.
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Kidnap & ransom for foreign projects.
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Political risk insurance for foreign
projects.
INSURANCE DEFINITIONS
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Refer to Insurance Marketplace (Rough Notes for the following definitions:
- Builders Risk (All Risk Coverage)
- Builders Risk All Risk (including Design Error)
- Construction Wrap-Up Liability
INSURANCE
& RISK MANAGEMENT SOURCES
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OTHER RESOURCES
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