Construction and erection/mounting insurance provides protection of interests of the parties to the construction process (customer, contractor, subcontractors, designers etc). The construction and erection insurance policy covers various risks related to:
Building/construction, repair, reconstruction of buildings and constructions;
Mounting, installation, upgrade, final adjustment, fine-tuning and commissioning of various equipment.
The Insurant can be:
The general contractor, since Article 705 of the RF Civil Code says that if construction contracts do not stipulate otherwise, the risk of an accidental loss or damage of an object under construction, and the cost of all materials and equipment is placed with the contractor;
Property developer, if the construction contract or related documents do not stipulate otherwise.
Insurable objects:
Object of construction, mounting and other works under the construction contracts entered by the Insurant or under other contracts including construction materials and buildings constructions mounted and/or assembled equipment and installations;
Materials and equipment delivered to the Customer in excess of the construction contract provided that their cost is included separately in the policy and in addition to the aggregate insured amount;
As agreed between the parties and provided that they are covered by separately, the insurants may choose to insure the equipment located on the construction site, construction equipment and mechanisms, and other objects.
Insurable risks:
fire, explosion, thunderbolt; soil subsidence and settlement; avalanche; land slide;
explosion of pressurized gas vessels, boilers and other engineering and hydraulic engineering equipment, devices, machinery and other similar installations;
fall of cranes, hoisted cargos, blocks and components of hoisting equipment;
utility network accidents;
errors and/or negligence during construction and mounting works;
collapse of construction or their sections and parts;
ANY OTHER SUDDEN AND UNFORESEEN EVENTS on the construction site that are not excluded from the policy or by insurance terms.
Exclusions:
War and political risks, civil unrest, acts of terror;
Nuclear explosion, ionizing radiation or radioactive pollution;
Malicious intent of the Insurant (of its employees in management positions);
Errors, faults or defections known to the Insurant prior to the occurrence of an insured event;
Indirect losses of any kind, including penalties, fines, losses through delays, default on or termination of contracts and loss of profit;
Errors in design;
Losses caused by wear & tear, corrosion, oxidation, decay, self-ignition and exposure to other special and natural properties of the materials;
Loss or damage of documents, design drafts, books, accounts, money, stamps and prints, debt securities, securities, receipts, information, software and/or data;
Shortages or damages disclosed during a stock-taking exercise;
Losses as the result of research or trial runs/experiments.
The insurance coverage is calculated:
For objects under contracts – based on their full contract (estimated) value, including the cost of construction materials and constructions, assembled equipment and installations, design works, salary and transportation costs, customs duties and levies;
For materials and equipment supplied by the customer, and for already available objects – based on the actual value of such materials, equipment and objects of property;
For equipment located on the construction site, construction vehicles and mechanisms – based on the cost of acquisition of vehicles/mechanisms of the same type/capacity as the insured vehicles/mechanisms.
Insurance period
The insurance remains in effect for the full duration of the contract, blank and operational testing of equipment, from the preparation phase or delivery of the first batch of insured property to the construction site till the commissioning of the insured object.
The policy can be extended by the duration of the guarantee period stipulated in the contract in relation to the objects that have already been commissioned and accepted under the contract by the contractor.
Franchise:
the insurance policy foresees a franchise, i.e. a share of the Insurant’s own participation in the restitution of damages. The damages within the size of the franchise shall not be coverable by the policy.
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