TAMA 38 Insurance – The Difficulties in Insurance Coverage for Winter Damage
Oct 17, 2017
Article by Itzik Simon
TAMA 38 insurance for strengthening the structure is affected by the natural phenomena that characterize the winter season more than any other urban renewal insurance policy. This is mainly due to the fact that a building strengthening project requires, at one time or another, the removal of the waterproofing and/or the tiled roof. This uniqueness is in addition to other unique characteristics of projects of this type, such as the fact that the construction site houses tenants and construction work simultaneously.
It is no wonder, then, that in many TAMA 38 (3-1) projects to strengthen and expand the building, water damage occurs during the winter, including water infiltration into the tenants' apartments, damage to the contents and the structure, sometimes to the point where the apartments are no longer habitable, which forces the developer or contractor to be required to finance the evacuation of apartments, find an alternative housing solution and claim tenants for compensation or indemnity, or of course: prepare in advance for the expected winter.
Unlike most urban renewal insurance , such as construction evacuation insurance or earthquake reinforcement insurance - the coverage in the TAMA 38-1 insurance policy (as amended) within the framework of the Contractors' Works Insurance - is directly affected by the natural phenomena of the winter season.
Therefore, special preparation is required, both practically in the field and at the level of formulating the policy and the insurance coverage it provides you.
It is important to remember: these damages have significant financial consequences in other ways: stopping work, disrupting work plans and exceeding planned schedules, and failing to meet obligations (delivering keys on time).
Defining the insurance event within the framework of a contracting work policy
The definition according to the BIT 2013 terms and conditions for contracting work insurance, which is common in the market, is: sudden and unforeseen physical loss or damage to the work site, to the project or part of it, for any reason that is not excluded according to the exceptions of this policy.
Rain damage may be considered foreseeable damage.
Water damage resulting from winter rain may be considered foreseeable damage: Rain is expected to fall, therefore, if the waterproofing and/or roof tiles - which separate the structure from the falling rain - have been removed, the damage may be considered foreseeable.
In such a case, there will be no coverage for damage caused by the rain to the building and its contents, as well as for the evacuation of the residents if necessary.
From the contractor or developer's perspective, the situation is actually even worse.
In most cases, insurance companies expand their disclaimer and explicitly state in the policy that there will be no insurance coverage for natural damage in winter as a result of removing seals or roofs. This has nothing to do with "expected" or unexpected damage.
Thus, in a more comprehensive but explicit statement, insurance companies are extending a much broader definition of 'protection umbrella' for themselves, which further reduces the options for insurance coverage for this type of damage.
1. Making do with the current situation - a type of gamble in which all that is left is to hope for the best. That is, construction/reinforcement work enters the winter period while taking into account the exclusion for expected damage that will be caused as a result of removing seals or roofs throughout the winter period, from October 1st to April 30th.
2. Preparation in scheduling the work - planning and preparation in scheduling the removal of the waterproofing and/or the roof - in the summer months, and treating it before the start of winter, may provide a solution even if it requires adherence to these schedules.
3. Negotiating with the insurance company - If there is an explicit intention to remove the waterproofing or the roof of the building during the winter - I recommend dedicating time and effort and addressing the issue in negotiations with the insurance company and in the lead. The first "hurdle" that must be faced is the insurance company surveyor. Preparing and presenting an engineering plan for protecting and waterproofing the building to be implemented immediately after removing the waterproofing or roof can be of great help.
The goal is:
To present solutions and remove the surveyor's and the insurance company's concerns about damage occurring as a result of removing the seals, thus paving the way for receiving insurance coverage for unexpected damage from rain in the TAMA 38 project - even in the winter season, damage that, after carrying out an organized work plan as mentioned, will be considered unexpected damage. This is not easy - but possible and even necessary.
Construction evacuation insurance
Construction evacuation insurance, similar to TAMA 38 insurance, is complex to implement and requires expertise in construction industry insurance, performing risk analysis, and going down to deep resolutions in everything related to the project execution processes. In addition to the risks of "regular" contracting work, winter damage is also added, which only increases the need to produce construction evacuation insurance policies with insurance coverage that gives you maximum insurance coverage, especially in light of the vigilance of insurance companies to the financial significance of these risks...
Building preservation and restoration insurance
The winter season can only exacerbate the risks involved in projects of this type and, by extension, increase the level of insurance risk and the exclusions, requirements, and conditions of insurance companies when they issue building preservation and restoration insurance. From the insurance company's perspective, this is a double risk - both because of the dilapidated condition of the building, and because of the damage from rain, flooding, and moisture, and because, in the event of an insurance event, the building must be restored and brought to its original condition. There are more 'mines' along the way. And also solutions...
Here are the options for dealing with the problem:
Winter is approaching and it is important that all those "involved" in the TAMA 38 project - the tenants/clients as well as the contractors and their employees - are aware of the many risks that characterize this season and that may harm the safety or health of the employees and tenants. For these reasons and many others, it is important to prepare accordingly in order to minimize the possibility of damage, injury or a claim that will arise due to a safety incident. Below are some tips for increasing site safety during the cold, windy and rainy days typical of winter.
Winter Safety - by Asher Asban
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