10 Important Principles for the Contractor When the Client Insures the Contract Works

From: Attorney Shikma Levi Ezra

Dear Contractor,
Is the insurance for the contracted work taken out by the client?
Does the client charge you for the insurance costs?
We have prepared a list of 10 requirements that must be met to protect your interests in this situation.

1. Care must be taken that the name of the contractor (insured) is explicitly recorded in full under "Name of the insured" in the contract work policy that will be prepared by the client.

2. It must be explicitly stated in the policy that the rights of the main contractor will not be reduced from the rights of the main insured in the policy and without detracting from the generality of the foregoing - including defense expenses in criminal proceedings, insurance for equipment and light work tools up to the policy limit, and the cancellation of any restriction that limits coverage for the main contractor.

3. The contract work insurance policy taken out by the client is primary and precedes any insurance taken out by our insured.

4. The client and the insurer on its behalf confirm that they will sign insurance certificates towards suppliers and contractors in the project on behalf of the contractor as required, and without derogating from the generality of the foregoing, also towards manpower companies and crane rental companies.

5. Chapter B - Third-party insurance includes the cancellation of the relevant exceptions and is expanded to include coverage for claims for compensation from the National Insurance Institute as well as bodily injury resulting from the use of a vehicle that is not subject to compulsory insurance - both at the full limit of liability.

6. The policy includes an extended maintenance period of 24 months and a running-in period of at least 60 days.

7. The client must ensure that an inspection is carried out with the appropriate authorities regarding the location of underground facilities and their mapping prior to carrying out any in-depth work.

8. It must be explicitly agreed in advance with the client whether there will be security on site and by whom, and the agreed-upon instructions regarding this matter must be obtained from the client.

9. It is necessary to ensure that a survey is conducted that examines the environment of the insured project and documents the condition of the buildings adjacent to it, with an emphasis on defects and damage that exist prior to the start of work, and that it is transferred to the insurance company.

10. The person who ordered the insurance must provide a copy of the list pages, the specifications to which the policy is subject, and a survey of underwriting information, including the insurance company surveyor's recommendations regarding risk mitigation measures and procedures for performing work in heat.