Renovation contractor insurance during war, what is important to know?
Nov 29, 2023
By: Itzick Simon
It's hard to believe that just a few weeks ago, the Renovation Contractors Association was preparing for a large-scale annual conference, the largest ever, which was scheduled to take place at the end of October at Dead Sea hotels. A festive event planned to host thousands of participants, including senior construction industry figures.
But in Israel, as in Israel, reality can change from one end to the other in an instant. Instead of conferences that could have continued the momentum, we are actually witnessing a regression that will end with no one to straighten us out.
Like its big brother, the construction industry, the renovation industry also experienced a deep and tangible crisis following the war. From the lack of orders for new projects to projects that were completely halted or significantly delayed. To this must be added the shortage of manpower due to the reliance on the eve of the war on approximately 15,000 Palestinian workers, who are not currently coming to work and it is doubtful whether they will return in such numbers in the future.
At the Itzick Simon Insurance Agency, which has been supporting the construction and renovation industries in Israel for about 35 years, we receive quite a few inquiries from renovation contractors. I would like to address some of the common issues we are asked about.
By: Itzick Simon
It's hard to believe that just a few weeks ago, the Renovation Contractors Association was preparing for a large-scale annual conference, the largest ever, which was scheduled to take place at the end of October at Dead Sea hotels. A festive event planned to host thousands of participants, including senior construction industry figures.
But in Israel, as in Israel, reality can change from one end to the other in an instant. Instead of conferences that could have continued the momentum, we are actually witnessing a regression that will end with no one to straighten us out.
Like its big brother, the construction industry, the renovation industry also experienced a deep and tangible crisis following the war. From the lack of orders for new projects to projects that were completely halted or significantly delayed. To this must be added the shortage of manpower due to the reliance on the eve of the war on approximately 15,000 Palestinian workers, who are not currently coming to work and it is doubtful whether they will return in such numbers in the future.
At the Itzick Simon Insurance Agency, which has been supporting the construction and renovation industries in Israel for about 35 years, we receive quite a few inquiries from renovation contractors. I would like to address some of the common issues we are asked about.
A renovation project that has been stopped, what about the insurance risks?
Many renovation projects were interrupted in Ivem during the war for various reasons. Workers not showing up, contractors called up for the reserves, clients evacuated from their homes, and the list goes on. This situation creates a situation where the renovated site poses many risks to visitors. For example, tenants who live in the renovated house or property owners who come to see the place before they have officially moved in.
Renovation contractor insurance provides coverage for third-party damages, including bystanders and visitors, but it is important to mark an asterisk. The renovation contractor must ensure that the sites are kept safe and that the hazards they contain are marked, fenced off, and closed. The responsibility is yours .
To the extent that a third party is harmed by a hazard that could have been removed or warned about, the insurance company may raise various claims against the insured. Whether by attributing "contributory fault" which will result in a reduction in coverage, or by completely waiving payment due to negligence. Be careful that you leave all "open" sites in the best possible safety condition, including full notification to the property owners or any other party who may arrive at the location. It is also advisable to instruct the tenants or property owners regarding dangerous areas or hazards.
Importantly, no less – document everything . Take good photos of the site and its "dangerous" areas. It is also a good idea to document the "safety training" that you provided to the property owners and not just do it verbally.
Many renovation projects were interrupted in Ivem during the war for various reasons. Workers not showing up, contractors called up for the reserves, clients evacuated from their homes, and the list goes on. This situation creates a situation where the renovated site poses many risks to visitors. For example, tenants who live in the renovated house or property owners who come to see the place before they have officially moved in.
Renovation contractor insurance provides coverage for third-party damages, including bystanders and visitors, but it is important to mark an asterisk. The renovation contractor must ensure that the sites are kept safe and that the hazards they contain are marked, fenced off, and closed. The responsibility is yours .
To the extent that a third party is harmed by a hazard that could have been removed or warned about, the insurance company may raise various claims against the insured. Whether by attributing "contributory fault" which will result in a reduction in coverage, or by completely waiving payment due to negligence. Be careful that you leave all "open" sites in the best possible safety condition, including full notification to the property owners or any other party who may arrive at the location. It is also advisable to instruct the tenants or property owners regarding dangerous areas or hazards.
Importantly, no less – document everything . Take good photos of the site and its "dangerous" areas. It is also a good idea to document the "safety training" that you provided to the property owners and not just do it verbally.
Renovation contractors, like business owners throughout the Israeli economy, may suffer indirect damage due to the war situation and the shutdown of business activity.
The contractor insurance policy does not, unfortunately, provide coverage for damages resulting from war or terrorism, and this also includes such indirect damages. Renovation contractor insurance provides coverage only for direct damage (due to a sudden and unexpected event) caused to property, employees or a third party, but as mentioned - the insurance excludes coverage for war and terrorism damages.
The solution to indirect damages lies in emergency decisions and regulations that the Ministry of Finance will establish (as in the case of Corona). Will the state stand by the business owners for compensation for such damages, and in what manner?
The draft regulations published for review at this stage indicate that the state does indeed intend to "put its hand in its pocket." It is quite reasonable to assume that there will be some assistance (also) for renovation contractors whose income has been affected. It is worth keeping a close eye on publications in the media and on relevant websites.
Compensation for indirect damage resulting from the shutdown of operations due to the war
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