Page 12 - Engineering Insurance IC 77 Ebook

The Insurance Times
designed to expand financial protection to the GENERAL REGULATION :
civil engineering contractors in the event of RELATING TO CONTRACTOR’S ALL RISK
accident to the civil engineering works under INSURANCE
construction. The name of the policy itself FOR RISKS HAVING SUM INSURED UPTO RS.
indicates that it is specially designed to cater 10 CRORES
to the needs of the civil engineering contractor 1. JURISDICTION :
in the matter of accidents to works under This applies to all Risks located in India, for
construction. which the value of the Civil Works involved is
more than 50% of the total contract value.
Ordinarily a civil engineering contractor tenders 2. For the purpose of these regulations the Sums
for a job on the basis of design specifications insured on the following items are to be taken
provided by the principal or soil conditions, into account for arriving at total Sum Insured
Weather conditions etc. Contractor is required for CAR Insurance :
to construct the civil engineering structure on a) Marine (imports) - Landed cost at site.
the basis of drawings and specifications for b) Marine (Indigenous) - Landed cost at site.
materials prescribed by the architect of c) Cost of Construction.
structural engineers. It is not within the scope d) Permanent Civil Engineering Works.
of the contractor to verify the design and e) Half the escalated Value, if escalation is
specifications. His responsibility is restricted to opted for.
construct as per the specifications and designs 3. MARINE/TRANSIT RISKS CONNECTED
of the architect and/or designer. WITH CONTRACTOR’S ALL RISKS INS
When Marine/Transit Insurance connected with
Any loss or damage to the contract works
Contractor’s All Risk Insurance of any project
during the course of the construction due to
(sum Insured upto Rs. 10 Crores) is placed in
ANY CAUSE will result in heavy financial loss
India simultaneously or later on in one
to the contractor. The principal/owner normally
combined policy or under separate policies, in
makes the contractor responsible for accidents
one department or in different departments, the
due to faulty workmanship, faulty material and
matter relating to both:
other errors of the contractor in the contract
i) Marine/Transit Cover and
conditions. A contractor’s margin of profit will
ii) Contractors All Risks Cover
not be adequate to reconstruct the work after
Is required to be underwritten, subject to these
damage. It is also not a commercial proposition
General Regulation.
for the contractor to provide funds for such
N.B. : The existing Open Policy Marine Rates
unforeseen and sudden losses. Thus in the
(if any) will not be applicable to any of the risks,
event of a claim, contractor will not be in a
falling to be rated under this Tariff.
position to Find resources for reinstating the
damaged property at his cost. The contractors
4. SUB-CONTRACTS FORMING PART OF A
All Risk Insurance will come to the contractor
PROJECT
rescue of supports him financially to over come
As regards Sub-Contracts forming part of a
heavy losses.
project, it is claimed that irrespective of whether
The Insurance Policy can be taken by Principal
the Project Value has been broken into various
or the contractor or sub contractor.
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