Dos
1. Understand the Scope of Your Project
- Assess the nature, size, complexity, and duration of your project.
- Identify specific risks (e.g., fire, flood, third-party liability, delay in start-up).
2. Choose the Right Type of Policy
Select appropriate policies like:
- Contractors All Risk (CAR)
- Erection All Risk (EAR)
- Contractors Plant and Machinery (CPM)
- Advance Loss of Profit (ALOP) / Delay in Start-up (DSU)
3. Disclose Complete Project Details
Provide accurate information about:
- Site location
- Construction materials
- Safety provisions
- Subcontractor details
4. Include Key Stakeholders as Insured
- Name owner, contractor, subcontractors, consultants, financiers as co-insureds to avoid coverage disputes.
5. Evaluate Insurer’s Claims History and Expertise
- Prefer insurers with experience in engineering/project insurance and a strong track record of claim settlement.
6. Insist on Professional Risk Survey
- A pre-inspection or technical survey helps in risk identification and premium negotiation.
7. Read the Policy Document Carefully
Understand:
- Inclusions
- Exclusions
- Deductibles
- Excess clauses
- Conditions precedent
8.Negotiate Policy Extensions
- Consider maintenance cover, testing cover, off-site storage, transit risks, and extended reporting period if relevant.
Don’ts
1. Don’t Underestimate the Sum Insured
- Avoid underinsurance-ensure sum insured reflects the full project value including escalation.
2. Don’t Ignore Delay in Start-up (DSU) Cover
- If the project has revenue or operational targets post-completion, exclude DSU at your own risk.
3. Don’t Rely Solely on Broker Recommendations
- Validate coverage needs independently; some brokers may push standard templates that don’t suit your project risks.
4. Don’t Delay Policy Purchase
- Always buy the policy before the project commences, including storage and mobilization phase.
5. Don’t Miss Reviewing Subcontractor Cover
- Check whether subcontractors are covered under your main policy or need to be insured separately.
6. Don’t Overlook Claims Procedures
- Understand timelines for notification, documentation required, and on-site reporting obligations.
7. Don’t Skip Policy Audits During Project Lifecycle
- Reassess insurance coverage if project scope changes, cost escalates, or timeline extends.
