Contracting work insurance, professional liability insurance, product liability insurance or any other insurance policy in the construction industry - these are complex and complicated policies (even for professionals) therefore achieving professional and comprehensive insurance coverage - at a reasonable cost, is not a simple task for the developer and contractor.
The goal of the developer or contractor is to achieve optimal insurance coverage at minimal cost. In most cases, a poor quality insurance array is purchased, often even at high costs, creating financial and personal risk for the client without their knowledge, while lacking coverage for significant risks - thus achieving the opposite goal.
Therefore, in order to achieve maximum insurance coverage for you and to provide you with quality professional support and value throughout the entire life of the project, from the planning stage until the end of your warranty period - it's recommended and worthwhile to do more. This is why we delve into the essence of the beam, go out to the field and strive to analyze and examine the special risks in the project and what are the real difficulties that the developer or contractor faces.
Only this way can we understand what a policy needs to include in order to provide an especially broad coverage umbrella, and in this way, understanding the difficulties teaches us how to remove from you the excess weight of difficulties, nuisances and unnecessary costs.
The difficulties faced by an entrepreneur or contractor
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Here are some examples of challenges that developers or contractors face regarding insurance:
1. Lack of knowledge - Often even the professionals surrounding the contractor don't understand contracting work insurance in general, and more complex insurance like TMA 38 insurance in particular. Thus, a contractor can operate for years under the "veil of ignorance of the law and regulations" as if everything is fine - until, heaven forbid, they get involved in damage or a claim for which there is no insurance solution due to deficient policies.
2. Between a rock and a hard place - It's natural that a contractor wants to win a tender. However, in many cases they need to submit a price quote based on incomplete data such as insurance costs, which are usually examined in depth only after winning the tender. When the cost of the insurance policy required according to tender conditions is much higher than planned - the contractor is surprised. Furthermore, in many cases the insurance company isn't interested at all in issuing a contractors' insurance policy, professional liability insurance, or product liability insurance according to tender requirements.
3. System of pressures - Here the list is long and varied. Responsibility and obligation to insure a site designated for construction even though work hasn't yet begun on the ground, a developer required by the Ministry of Housing to insure a project that hasn't yet started, a construction company that banks or other financing bodies pressure to maintain an especially broad insurance array that doesn't align with costs and/or their existing insurance plans.
4. Risk array - Lack of seeing the full picture by the developer or contractor regarding the complete risk array they face - leads to wrong decisions and underestimation of the importance of the insurance they need.
5. Preliminary requirements - Many contractors aren't aware of the vital need to conduct documentation surveys of the condition of buildings adjacent to the project as a condition for insurance coverage for damage to these buildings resulting from vibration and weakening of ground support or foundation. The result - lack of insurance coverage, disappointment, and significant financial damage.
6. Protection requirements - Often protection requirements raised by insurance companies aren't implementable at all, however they constitute a condition for insurance coverage and/or as a mandatory means of risk mitigation, usually without the developer or contractor being aware of the requirements and the meaning of their existence, and especially, the weight of responsibility placed on their shoulders as a result of not fulfilling them.
7. Accidents, safety and the criminal aspect - The law defines very clear regulations and procedures regarding safety measures required at a construction site, types of safety training that must be conducted and at what frequency - and more. Non-compliance with these regulations and procedures (even from lack of knowledge and not from initial intent or ignoring) may come back to you like a boomerang when an insured event occurs, especially an event with casualties. However, the boomerang may be double or triple if it turns out that compliance with procedures and regulations is a condition for policy validity.
Important information for you
The difficulties and challenges we've described here are obviously just a drop in the ocean. In real life, when arriving at the site or even just approaching a tender, the complexity of properly formulating serious insurance meets the particular circumstances. The balance between all the elements and circumstances is what turns good insurance into excellent.
As an insurance agency that has been dealing with construction insurance for about 37 years, we can say "we've seen it all". We know the insurance world and the construction industry from the ground up to the top.
Our experts know how to assist both with complex projects and in dealing with difficulties and challenges. Whether it's about client requirements that don't seem reasonable, whether from striving to prevent insurance gaps, or whether in specific adaptation to each and every detail.
Alongside personal consultation and guidance for each client, we've concentrated on the website before you a huge variety of professional articles as a service to the public. Articles written by our best experts that shed light on every corner of the construction insurance world in Israel. Including countless case studies, examples of real events, reference to recent changes and more.
Want more information? Our team of experts is here for you, we'd be happy to help.
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