Construction 101
31 May 2017
Construction insurance is required for any type of construction project, whether it is a new build project, or an addition or renovation to an existing building. Due to the intricate and complicated nature of construction work, there are a great deal of things to consider which require cover. Whether the client is a property owner or a project contractor, there are many different types of coverage available to suit the required needs.
Construction sites are very dangerous places. Despite health and safety regulations, accidents still happen. As most construction workers are self-employed they do not take out personal accident insurance. Therefore it is important to know the exact details of what is covered on a construction project before works again. Some of the many type of worker and contractor that can be found on a building site include architect, engineer, carpenter, labourer, fabricator, framer, mason, blaster, crane operator, driller, excavator, forklift truck driver, janitor, painter, plumber, welder, dredger, fencer, glazier, installer, ironworker, landscaper, pile driver, plasterer, pipefitter, sheet metal worker, health and safety officer, installer or site manager. Common accidents on work sites include slips and trips, falls from scaffolding and injuries from falling objects. Whilst some accidents such as bruising and cuts do not require long-term medical attention, more serious accidents such as bone breakages, paralysis, dismemberment and blindness can take years or rehabilitation and recovery. Coverage such as public liability and employers’ liability take care of insurance claims arising from injury to employees.
Construction can take on many shapes and forms. Whether the project is a building, road surface or renovation, cover needs to be taken out for stock, material and tools. The many types of construction project that can take place include basement structures, bridges, commercial buildings, dams, excavations, groundwork, highway and roadbuilding, roadway maintenance, industrial buildings, mining, new ground up construction, residential properties, condominium units, sewers and tunnels, sustainable buildings, pipelines and water mains, state construction projects, flood control, federal construction projects, power plants, manufacturing plants, solar wind farms and refineries. As well as protection for accident and injuries, pollution and contamination are risks to consider when disturbing land areas. Many construction sites generate high levels of dust from building material such as concrete, cement, wood, stone and silica which can travel large distances from the building site. Air pollution is very common and can also be caused by hazardous chemicals causing emissions of carbon monoxide, hydrocarbons, nitrogen oxides and carbon dioxide from noxious vapours by oils, glues, thinners, paints, treated woods, plastics and cleaners. Water pollution can be caused from pollutants soaking into the groundwater from diesel and oil, paint, solvents, cleaners, chemicals, debris and dirt. Building work also causes noise pollution from the use of heavy equipment such as drills, hammering, heavy duty vehicles and shouting from the workers on site. Cover for premises environmental liabilities need to be considered when handling hazardous materials, dumping and disposing of waste, as well as other harmful operations which can have damaging effects on the local environment. This also applies to clean up and remediation operations when attempting to tidy completed construction projects.
Construction operations also require the use of specialist tools, machinery and equipment. The breakdown, sabotage, theft or damage of such equipment can delay the progress of a project as well as proving costly to replace. Such items that need to be covered include heavy hydraulics, pneumatic drills, diggers, trucks, cranes, scaffolding, conveyors, excavators, trenchers, shovels, pipes, haulers, rollers, pavers, loaders, compactors, mixers, cherry pickers and forklifts.
Builder’s risk insurance covers most aspects of working on a construction. Taking care of damage of buildings whilst they are undergoing construction, builder’s risk also extends to the materials, fixtures, tools and equipment used during the course of construction. Damage, repairs, replacement costs, rental fees, riggers / hook liability, transportation, and boiler and machinery costs are all taken into consideration. This can be bought either by the custom builder or by the property owner. It is normally required in order to gain successful planning permission permits from local councils. Builder’s risk also applies to properties undergoing renovations, refurbishments, additions or extensions.
Wrap-Up Liability is an all-encompassing insurance which covers all contractors and sub-contractors working on a large construction project costing over $10m. It can either be sold as owner-controlled or contractor-controlled. Owner controlled insurance programs (OCIP) is bought by the owner on behalf of the builder or contractor and can include workers compensation, general liability, excess liability, pollution liability, professional liability, builder's risk and railroad protective liability. Types of projects suitable for this cover include fire resistive, non-combustible or masonry construction, or civil works, eg construction of bridges, dams, sewers and watermains. In order to qualify for this it may be required, along with a completed application form, to submit the following: site plan detailing neighbouring exposures, breakdown of values, construction schedules and geotechnical reports.
Construction sites are very dangerous places. Despite health and safety regulations, accidents still happen. As most construction workers are self-employed they do not take out personal accident insurance. Therefore it is important to know the exact details of what is covered on a construction project before works again. Some of the many type of worker and contractor that can be found on a building site include architect, engineer, carpenter, labourer, fabricator, framer, mason, blaster, crane operator, driller, excavator, forklift truck driver, janitor, painter, plumber, welder, dredger, fencer, glazier, installer, ironworker, landscaper, pile driver, plasterer, pipefitter, sheet metal worker, health and safety officer, installer or site manager. Common accidents on work sites include slips and trips, falls from scaffolding and injuries from falling objects. Whilst some accidents such as bruising and cuts do not require long-term medical attention, more serious accidents such as bone breakages, paralysis, dismemberment and blindness can take years or rehabilitation and recovery. Coverage such as public liability and employers’ liability take care of insurance claims arising from injury to employees.
Construction can take on many shapes and forms. Whether the project is a building, road surface or renovation, cover needs to be taken out for stock, material and tools. The many types of construction project that can take place include basement structures, bridges, commercial buildings, dams, excavations, groundwork, highway and roadbuilding, roadway maintenance, industrial buildings, mining, new ground up construction, residential properties, condominium units, sewers and tunnels, sustainable buildings, pipelines and water mains, state construction projects, flood control, federal construction projects, power plants, manufacturing plants, solar wind farms and refineries. As well as protection for accident and injuries, pollution and contamination are risks to consider when disturbing land areas. Many construction sites generate high levels of dust from building material such as concrete, cement, wood, stone and silica which can travel large distances from the building site. Air pollution is very common and can also be caused by hazardous chemicals causing emissions of carbon monoxide, hydrocarbons, nitrogen oxides and carbon dioxide from noxious vapours by oils, glues, thinners, paints, treated woods, plastics and cleaners. Water pollution can be caused from pollutants soaking into the groundwater from diesel and oil, paint, solvents, cleaners, chemicals, debris and dirt. Building work also causes noise pollution from the use of heavy equipment such as drills, hammering, heavy duty vehicles and shouting from the workers on site. Cover for premises environmental liabilities need to be considered when handling hazardous materials, dumping and disposing of waste, as well as other harmful operations which can have damaging effects on the local environment. This also applies to clean up and remediation operations when attempting to tidy completed construction projects.
Construction operations also require the use of specialist tools, machinery and equipment. The breakdown, sabotage, theft or damage of such equipment can delay the progress of a project as well as proving costly to replace. Such items that need to be covered include heavy hydraulics, pneumatic drills, diggers, trucks, cranes, scaffolding, conveyors, excavators, trenchers, shovels, pipes, haulers, rollers, pavers, loaders, compactors, mixers, cherry pickers and forklifts.
Builder’s risk insurance covers most aspects of working on a construction. Taking care of damage of buildings whilst they are undergoing construction, builder’s risk also extends to the materials, fixtures, tools and equipment used during the course of construction. Damage, repairs, replacement costs, rental fees, riggers / hook liability, transportation, and boiler and machinery costs are all taken into consideration. This can be bought either by the custom builder or by the property owner. It is normally required in order to gain successful planning permission permits from local councils. Builder’s risk also applies to properties undergoing renovations, refurbishments, additions or extensions.
Wrap-Up Liability is an all-encompassing insurance which covers all contractors and sub-contractors working on a large construction project costing over $10m. It can either be sold as owner-controlled or contractor-controlled. Owner controlled insurance programs (OCIP) is bought by the owner on behalf of the builder or contractor and can include workers compensation, general liability, excess liability, pollution liability, professional liability, builder's risk and railroad protective liability. Types of projects suitable for this cover include fire resistive, non-combustible or masonry construction, or civil works, eg construction of bridges, dams, sewers and watermains. In order to qualify for this it may be required, along with a completed application form, to submit the following: site plan detailing neighbouring exposures, breakdown of values, construction schedules and geotechnical reports.