Question and Answer: What is insured when part of the building is occupied and the other part is under construction?
Dec 28, 2022
Question:
A commercial building is in the partial handover stages. While the first floor has already been completed and occupied, the rest of the building is undergoing completion and repair work that takes time, partly because the client has not yet moved forward (he is still debating whether and what to occupy). At the same time, formal handover has not yet taken place and the insurance for the construction work is about to end these days.
We would be happy to know whether the contractor's insurance should be extended in the given situation and when the client/property owner should activate property insurance for the structure.
שאלה:
בניין מסחרי נמצא בשלבי מסירה חלקיים. בעוד שהקומה הראשונה כבר הושלמה ואוכלסה, ביתר המבנה מתבצעות עבודות השלמה ותיקון רג'קטים שאורכים זמן, בין היתר מאחר שלמזמין לא אצה הדרך (הוא עוד מתלבט האם ומה לאכלס). בד בבד טרם בוצעה מסירה פורמאלית וביטוח עבודות הבניה עומד להסתיים בימים אלה.
נשמח לדעת האם צריך להאריך את ביטוח העבודות הקבלניות במצב הנתון ומתי המזמין / בעל הנכס צריך להפעיל ביטוח רכוש למבנה.
Answer:
Many construction projects, both commercial and residential, are delivered in phases. Often, the building is temporarily occupied on certain floors while work continues on other floors.
Since the above situation is "on the seam line" between the completion of the work and the start of occupancy, it is advisable in these situations to maintain both coverages simultaneously - "two and three".
In other words, you must ensure that there is continued insurance coverage for the work and, on the other hand, purchase permanent insurance at this stage – building insurance, third party, employers' liability, and so on (as appropriate). This is to ensure that certain events do not "fall through the cracks" and to avoid as much as possible the possibility of "lack of insurance." It is recommended to be careful to distinguish between minor and serious and to act "by the book" and without any sleight of hand, since unfortunately "Murphy's Laws" work overtime in the construction industry.
Answer:
Many construction projects, both commercial and residential, are delivered in phases. Often, the building is temporarily occupied on certain floors while work continues on other floors.
Since the above situation is "on the seam line" between the completion of the work and the start of occupancy, it is advisable in these situations to maintain both coverages simultaneously - "two and three".
In other words, you must ensure that there is continued insurance coverage for the work and, on the other hand, purchase permanent insurance at this stage – building insurance, third party, employers' liability, and so on (as appropriate). This is to ensure that certain events do not "fall through the cracks" and to avoid as much as possible the possibility of "lack of insurance." It is recommended to be careful to distinguish between minor and serious and to act "by the book" and without any sleight of hand, since unfortunately "Murphy's Laws" work overtime in the construction industry.
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