Unexpected expenses on a construction site
Aug 24, 2018
By: Asher Asban – Teken Projects Ltd.
Introduction by Itzik Simon
Contractors and developers purchase contractors’ all-risk insurance in order to cope with unusual (seemingly) events that may occur at the construction site (including property damage, bodily injury, and the like). At the same time, in many sites the project is accompanied by quite a few “hidden” or “unexpected” expenses.
These range from National Insurance payments for workers employed at the site, through sanctions and fines under various circumstances, and up to subrogation claims by the National Insurance Institute in the event of a workplace accident (which are not covered by standard contractors’ insurance, but only by policies purchased wisely and with forward thinking).
Of course, these are only a few examples that hint at a much broader picture. Read an important article on the subject by Asher Asban.
Hidden expenses
Hello everyone,
Beyond all the usual “headaches” that are part and parcel of any construction developer/operator, there are several additional “hidden costs” you need to take into account. Below is a breakdown of these, along with my personal notes (which are, of course, my personal opinion and not legal advice):
To avoid issues like this, the construction operator must strictly adhere to the provisions of Form 648 of the National Insurance Institute. It’s simple, easy, and prevents headaches.
Regarding enforcement fines, at Teken Projects we actively protect and safeguard our clients’ rights. Here’s how:We have submitted appeals, arguing that the fines were issued without authority, not in accordance with the requirements of the order, contrary to the rules of evidence, and due to professional errors by the report submitters. None of the appeals we filed received a response from the Ministry of Labor—they simply chose to halt the process. We will wait patiently, keeping in mind that each fine ranges from approximately ₪22,000 to ₪35,000 per single violation.
Remember, under the Service Contractors Law (Employment of Workers by Manpower Contractors Law, 1996), a construction operator is required to hire manpower and crane contractors who are approved by the Ministry of Labor. If you employ a worker on your site from a contractor who lacks this approval, you may face a fine of ₪28,800. Again, such fines can be entirely avoided through simple and professional office management.
I also want to reiterate the issue of duplication in work accident claims (both from the National Insurance Institute and from other insurers). This is an issue that can be avoided—or properly prepared for—through efficient and professional office management.
Finally, I would like to emphasize that, beyond all safety and accident investigation matters, my office also provides a unique service: professional and legal handling of criminal matters that may arise during a work accident.
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