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What is not covered by a Contractors All Risk Policy?

by Dan Payton | Jul 31, 2018 | Contractors All Risk | 0 comments

The main part of the Contractors All Risks insurance is the Contract Works section which provides cover for the property being worked on (e.g. new house, etc.). But it’s important to be aware of what’s not covered by a contractors all risk policy.

these are just a few examples of what’s not covered by a contractors all risk policy :

Construction plant, equipment and tools
Consequential loss – loss due to delay, loss of any kind or description whatsoever including penalties, lack of performance, loss of contract, liquidated damages
Losses discovered when an inventory is taken
Existing property – unless it’s been specifically included in the cover
Faulty design, workmanship or materials
Errors and omissions
Stoppage of work whether total or partial
Willful acts or willful negligence of the Insured or of his representatives
Political acts ( these are insured under SASRIA)
The excess or the deductible stated in the Schedule

Are sub-contractors covered by a Contractor’s All Risks Policy?

This depends on the requirements of the Contract. Not all Contracts will require the Main Contractor to name sub-contractors as Insureds in their Contract Works policy. This in some cases they they are not covered by a contractors all risk policy.

Some sub-contract agreements require the sub-contractor to take out their own Contract Works Insurance and to name the Main Contractor and Principal as an Insured.

Typical contract trades for Contractors All Risks insurance cover would be general building contractors, air conditioning/heating engineers, aluminum door installers, electricians, shopfitters, bricklayers, carpenters/joiners, plumbers, plastering/partitioning/dry walling and floor/wall tiling contractors.

The Contract Works policy should follow the requirements of the Contract so it’s essential to understand the Contract properly to ensure that it mirrors the insurance policy correctly.

← What is Plant All Risk Insurance? Four types of Contract Guarantees and What They Insure →

What is not covered by a Contractors All Risk Policy?

by Dan Payton | Jul 31, 2018 | Contractors All Risk | 0 Comments

What is ‘Practical Completion’?

by Dan Payton | Jun 28, 2018 | Contractors All Risk | 0 Comments

Practical Completion doesn’t mean the Contractor has finished the Works in every detail. It means the Works are sufficiently complete to be safely used by the Employer for the purpose he intended. The Contractor may still complete minor items and fix defects after Practical Completion, as long as the Employer isn’t inconvenienced.

Why is a Contract Works Policy Necessary?

by Dan Payton | Jun 28, 2018 | Contractors All Risk | 0 Comments

When it comes to planning a new construction project, insurance doesn’t always get the priority it requires, with contractors often wondering whether it is really necessary to take out a contract works policy at all. Very often the contract works policy is arranged at the last minute, or even after the project has already started.

What Are Latent Defects?

by Dan Payton | Jul 23, 2018 | Contractors All Risk | 0 Comments

A Latent Defect is a defect that is not detected by ordinary inspection, but lies hidden until sometime later, when it’s discovered because it causes a problem that everyone can see. An example of latent defects would be weak concrete in part of a bridge column, that looks the same as strong concrete, but collapses when a heavy truck drives over the bridge.

What is the Defects Liability Period?

by Dan Payton | Jul 12, 2018 | Contractors All Risk | 0 Comments

The Defects Liability Period starts when the Certificate of Completion is issued and continues for the period agreed to in the Contract. During the Defects Liability Period, the Contractor has to obey all written instructions from the Engineer to carry out repairs and fix any defects which appear in the Permanent Works, so that, at the end of the Defects Liability Period, the Permanent Works are in the condition required by the Contract.