All building projects involve a variety of risks including, amongst others, environmental, financial, political and technical aspects of a project. Various techniques are available to identify such risks and to manage them during the lifespan of a project. Some risks may be dealt with by insurance.
Generally, five types of insurable risks apply to all construction projects:
• Contract Works Insurance deals with the whole works during the construction period including plant and materials, work by specialist contractors, and additional professional fees where damage to the works occurs. Such a policy may be extended to include damage to existing buildings during alterations and additions and/ or to include adjoining structures.
• Supplementary Insurance deals with expense or loss caused by events outside the normal control of the parties including civil commotion, riots and strike action to the extent it is not included in the CWI policy, provided by Sasria in South Africa, or NAasria in Namibia.
• Public Liability Insurance provides indemnity in the event of a death or injury to any person and or accidental loss or physical damage to tangible
property.
• Removal of Lateral Support Insurance applies where the execution of the works may cause weakening or damage or interference with the support of land or property within the site or adjacent to the site.
• Other Insurances may apply, for example, where goods are imported from overseas specifically for installation in a project to cover risks in transit.
The tender documents must specify that insurances of the works must be in the joint names of the parties and that the employer is the beneficiary of any insurance claims, and irrespective of whether the employer or the contractor insures the works – the employer pays the insurance premiums.