Section B – Third party liability insurance
By definition, Third Party Liability insurance indemnifies you for any amount you are legally liable to pay as compensation due to an event which occurs during the period of insurance stated in the policy, as a result of performing the works insured under Section A of the policy, at the work site, in its immediate vicinity or anywhere else in the State of Israel and the occupied territories directly related to the project.
As with any construction insurance policy – due to the complexity of the works, constant changes at the work site, the large number of contractors, workers, equipment and heavy equipment and especially so the unique aspects of each construction project compared to any other (See for example: Residents of buildings in National Outline Plan 38 projects) – a review of the conditions of the Third Party Liability section of the standard Contractors All Risks policy shows that this type of insurance contains numerous exclusions and limitations to the insurance cover.
Our role, in view of all of the exclusions and demands of the insurance companies, is to make our best efforts to obtain the broadest insurance cover at the lowest price for the client.
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Hereunder is an example of five areas in which a standard Third Party Liability insurance section excludes extremely important matters:
National insurance institute subrogation claims:
There is an almost automatic widespread opinion that if a worker is injured – the National Insurance Institute will pay. Yes, but…The National Insurance Institute will indeed pay however it is entitled to recover the compensation it has paid and will continue to pay to the worker in the future, either in the case of disability entitling the worker to lump-sum compensation or to a monthly benefit – from the party that caused the damage (The professional term for this spiral claim process is “subrogation”). In such a case the liability to pay for these damages can return to the property developer, the contractor, the principal, the subcontractor or anyone else other than the direct employer who makes national insurance contributions (since the direct employer, having made the national insurance contributions, is immune from National Insurance Institute claims).
This is one reason why a “standard” Third Party Liability policy does not provide sufficiently adequate insurance cover for the risks you are exposed to.
Insurance cover for vibration, removal of support and weakening:
Performing excavation or deep foundation works that could undermine the stability of the ground or weaken adjacent buildings? The standard policy does not cover such damage. In order to include cover for such damage in the Third Party Liability section – the policy needs to be extended. These extensions cannot be obtained simply by asking the insurance company to provide them.
There is a specific process that needs to be completed to obtain these extensions, details of which we will be pleased to provide on request.Important information regarding claims in the context: Surveying and documenting the condition of buildings surrounding the project area.
Article by John Geva Hadar & Co. Law Offices concerning a High Court ruling in June 2017.
Property damage as a result of collision by motor vehicles:
A truck or crane offloads equipment or raw materials at the construction site and damages a neighbouring building.
It may be natural to assume that Third Party Liability insurance is specifically designed to cover cases like this; however that is not actually the case.
In principle, Third Party Liability insurance excludes cover for damage to property as a result of collision by motor vehicles and without a special extension for damages of this type there is no insurance cover.
Third Party Liability insurance for property damage by motor vehicles is limited by amount and hence any damage exceeding the limits of liability under the Third Party Liability policy of the motor vehicle causing the damage would fall on you!
Bodily injury as a result of damage by heavy equipment which is not subject to statutory motor bodily injury insurance requirements – A tower crane is an example of heavy equipment that is not subject to statutory motor bodily injury insurance requirements. The same applies to rollers or aerial work platforms. If these types of heavy equipment cause bodily injury whilst being used – there is no insurance cover other that if a special extension is included in the policy.
Returning to the beginning of this section where we mentioned the potential for bodily injury claims at construction sites – it turns out that the need for such extensions is a matter of paramount importance!
For further information and a list of heavy equipment which are not subject to statutory motor bodily injury insurance requirements.
Consequential loss due to damage to underground facilities – The Third Party Liability section under the Contractors All Risks policy covers direct damage to underground facilities such as electrical cables, network cables and any other underground facility only; that is the cost of repairing the damaged pipe or equipment. However, any consequential loss that may occur to the Israel Electric Corporation, Bezeq, the local authority or to any business in the area – is not covered unless the policy has been especially extended to provide such cover.
Summing-up this partial review is the first and most important advantage – experience
The saying “experience is the best teacher” becomes all the more relevant and significant when dealing with such a complex and intricate sector such as Contractors All Risks insurance. We have been specialising in providing insurance for the construction industry for 25 years and we have amassed extensive knowledge concerning diverse matters such as hazards, mishaps and accidents, their causes and their prevention and we are familiar with the inherent concerns of the insurance companies coupled with your needs as the client. Our regular presence at construction sites has also enabled us to develop a keen eye for specific aspects of construction projects that need to be addressed in the framework of the insurance cover and to adequately address the terms and conditions, exclusions and extensions in the policy. In a nutshell – we have the knowledge and experience to plan and formulate quality insurance portfolios for construction companies, building contractors, National Outline Plan 38 projects – with specific reference to the Third Party Liability section.
The immense efforts we invest in collating information about the project with the aid of construction insurance experts, to analyse and identify the unique aspects of the project and its specific characteristics (bearing in mind that no two construction projects are identical), to prepare a detailed schedule of predictable risks (as well as unpredictable risks which we have learned to identify over the years) has stood the test of time.
Based on this information we devise creative solutions in an attempt to limit the quantity and scope of the exclusions as far as possible and obtain the extensions you need to achieve the most optimal insurance cover.
Finally, we negotiate amendments to the policy wording to adapt each clause, extension, exclusion and condition to your needs in order to optimise your position in the event of a claim and avoid any disputes at the moment of truth.
Summing-up this partial review is the first and most important advantage – experience
It’s important to emphasise that we review other matters in-depth as follows:
✔ Obtaining quotations from the insurance companies. Sometimes, the potential for a large number of casualties at a construction site is the main reason why some insurance companies are hesitant to provide cover for a complex project and this is where our extensive experience is an advantage. The insurance company underwriters we have been working with for many years rely on our professionalism and integrity. Our success rate in obtaining quotations for Contractors All Risks cover is close to 100%.
✔ What is included in the extended insurance cover? As we have explained, the standard Third Party Liability section of the policy provides insufficient protection for the needs of our clients and the risks level they are exposed to. Over the years we have developed a list of special amendments to the policy wording to extend the cover and provide you with more favourable conditions, together with the minimum scope of demands and exclusions by the insurance companies.
✔ The price of the insurance cover. As a leading insurance agency in the construction industry, we are able to provide you with extensive cover at a reasonable price.
✔ Personal attention and support during the entire process. The broad insurance cover and competitive premiums go hand-in-hand with professional assistance at all times. In the event of a claim, we establish a team of professional and experienced specialists including loss adjusters, surveyors, engineers and in certain cases accident investigators in order to provide you with maximum protection and rights under the policy to enable you to repair the damage as soon as possible.
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