The shutdown in the construction industry and the expected delays in schedules
Oct 18, 2023
By: Itzick Simon
One of the initial and immediate effects of the war situation is the immediate freeze on the construction industry at a level we have never seen before. Almost all authorities in Israel have imposed a complete ban on the performance of work. Both due to the lack of adequate protection measures against missiles at sites and due to the attempt to prevent the entry and accommodation of workers (legal and illegal) from the territories.
The matter is connected to the complete closure imposed on the Judea and Samaria territories on the morning of October 8, which prevents the entry of approximately 80,000 Palestinian workers into Israel. At the same time, the planning and construction committees were also shut down.
The economic damage is enormous. Just recently, the construction industry suffered financial damage of approximately 250-300 million shekels as a result of the fighting in Operation Shield and Arrow, which lasted only 5 days.
According to data from the Contractors Association, every day Operation "Ala" costs the construction industry about 50-70 million shekels. Not only that, the damage from the previous operation only affected the shutdown at construction sites in the Gaza Strip, while at other sites in Israel the shutdown was only related to the workers due to the difficulty of reaching a protected area within a minute and a half. Now we are in a state of almost total shutdown of the economy throughout the country.
Is the project delayed? One of the main problems that many contractors and developers fear is that the project will exceed the policy period. This problem is exacerbated in light of the current situation in the construction insurance market in Israel, which is influenced by trends in the construction insurance market worldwide. A change in trend that began with reinsurers abroad, and within the framework of which is the extension of contractor work insurance, is no small matter. On the contrary. Insurance companies are reluctant (to put it mildly) to extend policies, and often pile up difficulties to the point of tightening conditions and even outright refusal. We recently published an extensive article on this subject on our website – read here .
By: Itzick Simon
One of the initial and immediate effects of the war situation is the immediate freeze on the construction industry at a level we have never seen before. Almost all authorities in Israel have imposed a complete ban on the performance of work. Both due to the lack of adequate protection measures against missiles at sites and due to the attempt to prevent the entry and accommodation of workers (legal and illegal) from the territories.
The matter is connected to the complete closure imposed on the Judea and Samaria territories on the morning of October 8, which prevents the entry of approximately 80,000 Palestinian workers into Israel. At the same time, the planning and construction committees were also shut down.
The economic damage is enormous. Just recently, the construction industry suffered financial damage of approximately 250-300 million shekels as a result of the fighting in Operation Shield and Arrow, which lasted only 5 days.
According to data from the Contractors Association, every day Operation "Ala" costs the construction industry about 50-70 million shekels. Not only that, the damage from the previous operation only affected the shutdown at construction sites in the Gaza Strip, while at other sites in Israel the shutdown was only related to the workers due to the difficulty of reaching a protected area within a minute and a half. Now we are in a state of almost total shutdown of the economy throughout the country.
Is the project delayed? One of the main problems that many contractors and developers fear is that the project will exceed the policy period. This problem is exacerbated in light of the current situation in the construction insurance market in Israel, which is influenced by trends in the construction insurance market worldwide. A change in trend that began with reinsurers abroad, and within the framework of which is the extension of contractor work insurance, is no small matter. On the contrary. Insurance companies are reluctant (to put it mildly) to extend policies, and often pile up difficulties to the point of tightening conditions and even outright refusal. We recently published an extensive article on this subject on our website – read here .
What is important to know?
· Don't wait until the last minute – insurance companies are under a lot of pressure in general, and especially in these turbulent times. Don't wait until the last minute when the policy is about to expire. Submit the extension request at least two months before the deadline. Draft the request carefully, consult with insurance agents and double-check that you have all the relevant documents.
· Silence is not consent – submitting the application does not release you from your obligation. The policy is extended de facto only upon receipt of express approval from the insurance company for the extension, and not one minute beforehand.
· Avoid working without a valid policy – has the insurance expired? Do not perform any construction work or operations on site. Do not rely on luck and do not say “it won’t happen to me.” Murphy’s Laws of overtime workers on construction sites.
Don't wait until the last minute – insurance companies are under a lot of pressure in general, and especially in these turbulent times. Don't wait until the last minute when the policy is about to expire. Submit the extension request at least two months before the deadline. Draft the request carefully, consult with insurance agents and double-check that you have all the relevant documents.
Silence is not consent – submitting the application does not release you from your obligation. The policy is extended de facto only upon receipt of express approval from the insurance company for the extension, and not one minute beforehand.
Avoid working without a valid policy – has the insurance expired? Do not perform any construction work or operations on site. Do not rely on luck and do not say “it won’t happen to me.” Murphy’s Laws of overtime workers on construction sites.
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