Construction All Risk insurance

The all-risk construction insurance policy covers construction companies, financiers, and disposers for property damage and for injuries or damages to third parties during the execution of the project.

At Howden we have a dedicated team for the construction business who design tailor-made insurance solutions, implementing risk analysis for each project that are precisely tailored to the identified risk profile. It is for this reason that our team of specialists has designed a framework of coverage adjusted to the construction techniques of our country, eliminating or modifying international clauses included in most insurance companies, which do not apply and may be grounds for objection of compensation. Our team can introduce you to the advantages Howden has to offer.

All policies include coverage for temporary structures and works, including renovations or improvements, and can include machinery used on the project. If your project is financed, the lender may require additional insurance to safeguard its financial interest in the project.

What are the risks covered by an all-risk construction policy?

An all-risk policy covers all risks except those expressly excluded. However, all insurance policies have exclusions; it is your broker's job to make sure you are fully aware of the policy exclusions and aware of what is not covered.

Basic Coverage:

Property damage coverage covers events that cause loss to your own assets or profitability, some of the events covered but not limited to are:

• Fire
• Lightning
• Earthquake, tremor  
• Typhoon, strong winds
• Flood
• Explosion 
• Aircraft crash
• Vehicle impact
• Smoke damage
• Water damage 
• Breakage and/or overflowing of water tanks, apparatus or pipes
• Electrical fire
• Theft
• Strike, riot, civil commotion and intentional damage
• Terrorism
• Volcanic eruption

Additional coverages:

• Construction errors due to defects in workmanship, design, plan or specification.
• Loss of income due to a loss, some financial institutions require this coverage.
• Homebuyer protection insurance (now mandatory for new building permits in major cities).
• Unforeseen unforeseen costs
• Land problems      
   

Third-party coverage 

Protection is also offered for liabilities to affected third parties, e.g. accidental bodily injury and claims for property damage caused in the execution of the project and with the possibility of extending to homebuyer's protection insurance, the latter with a longer period of coverage to the execution of the project.

Some examples of typical clauses for third parties: 

• Damage to adjacent property.
• Injury or death to third parties
• Damage to subway pipes or cables
• Vibration, removal and weakening of supports
• Project owner/contractor's facilities and equipment 
• Property under care and control
• Owner-supplied material
   

Supplemental policies that are part of the transfer of construction risk:

• Construction contract in which the performance of contractors and subcontractors must be guaranteed.
• Homebuyer's protection insurance, which may be taken out with the insurer of the All Risks Construction policy or with another company. It protects the builder for damage caused by a design error or faulty workmanship that is not discovered until later. The insurance covers the costs associated with repair work. The policy can be used for up to 10 years after completion of the construction work. Sometimes referred to as "advanced loss in profits insurance," delay in start-up insurance protects against loss of income resulting from damage to works and structures that cause a delay in the completion of the project. 
• Project workers insurance
• Environmental liability: If an accident occurs that pollutes the land, air or water or damages natural resources and/or biodiversity, the cleanup can run up a huge bill. Environmental liability insurance is there to cover the costs of restoring the balance. 
• Construction professional indemnity, construction professional indemnity protects you from claims in the event of negligent work, poor advice or errors and omissions. Contact Howden for a package tailored to your needs.
• Non-damage delays With a "no-damages for delays" clause, prime contractors may be required to pay liquidated damages to subcontractors if the project is delayed. A "no-damage for delay" clause transfers this risk (subject to certain conditions; for example, intentional delay is excluded).