Before a real estate development, work or reform, no matter how big or small it may be, there are several construction insurances in operation. Today we want to talk about the main ones, to avoid possible confusion among them.
We have divided the types of insurance for construction works into 5 large groups: Civil Liability Insurance, All Risks, Ten-Year, Accident Insurance, Construction Agreement Accident Insurance and Building and Civil Works Insurance. Let’s see what each of them consists of and, if your company needs to take out a policy for construction or renovations, do not hesitate to ask us about our Construction Insurance.
1. Construction Liability Insurance
Before a work, there are many people involved in it: from architects, builder, promoter… All of them must have their civil liability covered to avoid problems in the future.
This construction insurance protects us from damages caused to third parties in an involuntary manner, of course.
Examples:
- The architect shall be liable for a design error.
- The builder, if during the work he causes damage, for example, to a member of another contractor, shall be liable.
- The promoter, if the work causes damage to third parties, is also liable.
These figures are sometimes “mixed”, as they act in a coordinated manner. For example, the developer subcontracts the construction, so he is liable for damages caused by the builder to his clients, the buyers. One way to protect yourself may be to be included as an “additional insured” in the builder’s policy.
2. Construction All Risks Insurance
This is also a very important construction insurance, since it protects the work being carried out. A peculiarity of civil liability insurance is that it covers damages to third parties, but not the property being worked on.
This is an exclusion that, although unknown, is very relevant in the event of a claim.
Example: If I am installing a glass enclosure in a building and it falls to the ground and breaks, I am not covered by the Civil Liability insurance. It is my own damage, since these goods are in my possession and under my custody.
This all-risk policy will cover the cost of the work being carried out, due to its own failures or unpredictable issues: fire, theft, wind, hail, frost…
3. Ten-year insurance
Compulsory policy in promotions intended for the sale of homes. However, it can also be contracted and is used in offices, shopping centers, sports centers, industrial buildings…
The one who must and wants to make this ten-year insurance is the construction promoter.
It guarantees the rights of the user for possible material damages arising in the building… Its most basic coverage refers to structural damages that compromise the stability of the building.
The duration of the ten-year insurance is 10 years for the main coverage.
However, there are also optional coverages such as: waterproofing issues, pre-existing assets, installations…
Its peculiarity is that a TCO(Technical Control Body) is usually required to supervise that the work is executed in accordance with minimum quality requirements.
4. Building and civil works insurance
This building and construction insurance is specific to civil works. It covers construction-related damage when it is the direct consequence of an unforeseeable accident. Civil works insurance usually covers the contractor’s own damage and damage to third parties (personal injury, property or objects).
5. Construction accident insurance
Usually, most of the sectoral agreements in the construction industry require accident insurance to protect the workers of these companies.
As required by the agreement, in the event of an accident, the compensation will be a right for the employee of the company. The company will then have to pay it, if it has not externalized this risk through insurance. We are talking about amounts usually in excess of €30,000.
We could talk about so many others that are important, such as:
- Machinery breakdown insurance.
- Surety insurance as an alternative to bank guarantees.
If you want help in the management of construction insurance from PIB Group Iberia you will have the advice you need. Keep in mind that most of these insurances must be studied before the beginning of the work. We will facilitate this task from the study of the policies, negotiation with the companies and claims management. Contact us and worry only about your business.
