Construction Industry Insurance

Please Explain The Advantages And Disadvantages Of Taking...

New postby Amada » 26 Oct 2012, 10:28

Please explain the advantages and disadvantages of taking insurance in construction industry.?

I need it ASAP.
Thank you for helping me.
Thanks.
Amada
 
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New postby Dell » 26 Oct 2012, 10:28

Main advantage:
You will go bankrupt if you are sued and you don't have insurance.

Main disadvantage:
Cost
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Please explain the types of insurance in the construction...

New postby Christel » 26 Oct 2012, 10:28

Please explain the types of insurance in the construction industry? Please explain the types of insurance in the construction industry?
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New postby Aubrey » 26 Oct 2012, 10:28

All Risk Insurance

As a purchaser, you should ensure that your contractor takes out an All-Risk or Builder?s-Risk policy in which he names you as one of the beneficiaries. This type of insurance policy is project specific ? meaning that the policy is for your building construction only. This policy would be in addition to the contractor?s general business insurance and his liability policy. (You can ? and should ? request proof of these last two policies.) All-Risk insurance fees are based on the project cost, length of construction, contractor?s experience etc. The policy normally covers work in place, materials and equipment on site, in transit, even in some cases stored off-site. The cost of this insurance policy is often downloaded to the consumer either directly or in-directly.


Bid Bond

At the time of soliciting bids fro your construction project, you can require bidders to provide a bid bond. This is a form of prequalification for the purchaser. In order to get bonding, contractors are scrutinized very carefully by bonding companies or their insurance brokers. The bid bond ensures that anyone submitting a quotation for your project will in fact sign a contract ? even if their bid is quite low. If they do not sign a contract, the bonding company will pay the difference to have the next lowest bidder complete the project. In this case, the contractor who would not sign a contract will not likely ever be able to get another bond.


Performance Bond

When a bid bond or other type of bid deposit used, Performance and Labour & Materials bonds are often required. The performance bonds protect purchasers from contractors not finishing a project. If a contractor backs out of a project fro which he was bonded with a performance bond, the bonding company steps in and provides the necessary funding to complete the original contract. Again, that contractor will not likely get bonding in the future.


Labour & Materials Bond

Labour & Materials bonds are most often used in tandem with the performance bonds. They also protect the purchaser from an unscrupulous contractor. If a contractor does not pay his suppliers or subtrades, a great deal of litigation can follow, including liens against the property placed by law-suits. Should this happen with a labour & materials bond in place, the bonding company takes the burden from the purchaser and works to clear up the problem.

Of course once the construction work is complete, you will want to get your completed building insurance in place and add contents insurance as required.
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