Is it possible to "freeze" contractor work insurance?
Dec 25, 2023
By: Attorney Louisa Matatov
question:
The shortage of workers due to the security situation has meant that the site has been down for two months. Can the insurance be frozen?
By: Attorney Louisa Matatov
question:
The shortage of workers due to the security situation has meant that the site has been down for two months. Can the insurance be frozen?
answer:
A contractor's work insurance policy does not include an option or concept of "freezing insurance." If work on the site has not yet begun, the insurance can be canceled and reopened upon renewal.
As the project work progresses, it is a situation in which there are naturally various third-party risks to passersby, visitors to the site, or to the site's surroundings in general. In urban renewal projects according to TAMA 38/1 (reinforcement and expansion) that take place while the tenants continue to live in the building, things are doubly complex. The risks are increased with regard to bodily harm to tenants or visitors, and in addition, the risks continue with regard to damage to the existing structure and the works themselves.
Therefore, and accordingly, not only is it impossible to freeze the insurance, but it is of great importance to continue it.
Furthermore, please note! In most contractors' insurance policies used in Israel , insurance coverage is not valid in the event of a work stoppage on site for more than 90 days!
In other words, not only is it not possible to freeze the insurance, but it is desirable for the insured to arrange, in a specific application to the insurance company, the continuation of coverage, subject to the protections that will be determined even if work is interrupted for three months or more.
As a general rule, our recommendation is not to completely stop work on an active project. It is always better to continue work, even at a low intensity, and to ensure that there is always a team present on site. Even if it is a small team, this will allow you to monitor the site and what is happening there. Such a situation will also ensure compliance with the policy terms regarding insurance continuity.
Answer:
A contractors' insurance policy does not include an option or concept of "freezing insurance." If work at the site has not yet begun, it is possible to cancel the insurance and reopen it when work resumes.
As long as the project work is in progress, this is a situation where there are naturally various third-party risks toward passersby, visitors to the site, or the site environment in general. In urban renewal projects under TAMA 38/1 (strengthening and expansion) that take place while residents continue living in the building, matters are doubly complex. The risks are heightened regarding bodily injury to residents or visitors, and additionally the risks continue regarding damage to the existing structure and to the work itself.
Therefore, and accordingly, not only is it impossible to freeze the insurance, but its continuation is of great importance.
Moreover, pay attention! In most contractors' insurance policies common in Israel, the insurance coverage is not valid in case of work stoppage at the site for more than 90 days!
In other words, not only is there no possibility to freeze the insurance, but it is advisable that the insured arrange through a specific appeal to the insurance company for continued coverage, subject to protections that will be determined even if work is stopped for three months or more.
As a rule, our recommendation is not to reach a complete stoppage of work in an active project. It is always preferable to continue work, even at low intensity, and to ensure there is always a team presence at the site. Even if it's a small team, as this way it will be possible to supervise the site and what happens there. Such a situation will also provide compliance with the policy conditions regarding insurance continuity.
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