Contractor insurance certificate in its uniform format according to the current regulations of the Capital Market Authority - Insurance Supervision, is typically required by every party participating in a construction project: public entities such as the Ministry of Housing or the Israel Land Authority that require developers and contractors participating in government tenders to provide insurance certificates, various government ministries regarding projects carried out for them and/or within entities under their purview, public authorities, local authorities and so forth.
The uniform insurance certificate should be tailored according to the occupation and business of the certificate requester, in accordance with coverage codes according to a pre-determined list approved by the Capital Market Authority - Insurance Supervision. The insurance policies and extensions required from the insured party are coded according to their occupation and the nature of their engagement with the work/services commissioner.
Confirmation of insurance - your "winning ticket" in the auction
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These certifications are required not only in the public institutional sector:
In the private sector - insurance certificates are also required by private entities participating in the initiation or execution of projects and wishing to protect themselves through an insurance company's commitment document regarding the existence of insurance and its terms - toward them. A routine example of this: insurance certificate toward the developer in an agreement with execution contractors.
Owners in an Approval to Public Act (TMA) project - strengthening, demolition and construction, or evacuation-reconstruction: apartment owners in various types of TMA projects who wish to protect themselves both from third-party claims and from damages to the work, existing building, or their apartment contents - require insurance certificates signed by the insurance company of the developer/contractor. Similarly in evacuation-reconstruction projects - apartment owners wish to protect themselves from claims against them by virtue of their conceptual liability as owners, and to secure their financial rights in case of damage to the project during construction.
The funding entity - even the lender bank requires an insurance certificate for extending credit or financing a project.
From this it is clear: without presenting a uniform insurance certificate that reflects the policy content while specifying coverage codes and extensions determined by the Insurance Commissioner, and in accordance with the coding required by the certificate requester - there is no winning the tender, no deal, or no financing.
Insurance certificate - stronger than the policy!
In most cases, a uniform insurance certificate is no longer just a basic document but a real policy 'substitute' that reflects the certificate requester's requirements in alignment with the policy content, and what is agreed upon in it even supersedes the policy if the insurance company includes a change in it that contradicts what is stated in the policy. There is no doubt that to obtain the coveted "winning ticket," serious work needs to be done here, and it's preferable that this be carried out by a professional agent whose area of expertise this is.
Here are some points to pay special attention to:
The main problem in the process In most cases, the tender participant commits, when submitting the tender, to present an insurance certificate in the uniform format and according to the conditions specified in the insurance annex attached as part of the tender conditions, after winning it. All this happens when in most cases they don't bother to approach the insurance company at this preliminary stage of tender submission, to receive its approval or response to the requested certificate format and the tender conditions and requirements, thereby actually committing with their signature to the tender conditions even before checking the insurance feasibility.
Here are three possible scenarios:
We have the tools, knowledge, experience, and valued standing with insurance company underwriters to obtain an insurance certificate for you, negotiate with the tender commissioner, authority, or financial entity. Don't hesitate to contact us. |
Process for obtaining insurance confirmation
In a minority of cases, a signed certificate of insurance (as a certificate in principle) should be attached to the tender submission documents. In these cases, it is easier for all parties involved: the insurance company, the client yourself and us - as those who must provide you with the answer - because everyone is walking on safe ground. The certificate is only a document in principle, but its terms have already been agreed upon in advance.
In these cases, it is important to pay attention to the deadlines specified in the tender for submitting questions, reservations, or special requests that will only be discussed within a certain specified period of time - after which the document must be submitted as part of the tender submission - without any changes or reservations.
However - in most cases, the tender winner submits the uniform insurance certificate only after winning. The tender documents are transferred to the insurance company only at this stage, and it then raises its reservations, exclusions, and hedging requirements, deletes the codes that reflect the clauses, formulas, and scenarios it is unwilling to insure or that are inconsistent with the policy the insured already holds, or the policy it is willing to sell. This is a situation where one needs to negotiate both with the insurance company and with the tender commissioner, if possible and still viable.
If there is a need to present a uniform insurance certificate also to the financial lender, or any other commissioner and/or legal entity (such as a party to a combination transaction) - the same process will take place with that entity as well.
Here, we again emphasize that the fact that the insurance certificate and what is written in it is "stronger" legally than the policy itself, causes the insurance company to put its full weight in negotiations on the clauses that will appear in the uniform insurance certificate and their wording.
The insurance supplement and its meaning The uniform certificate found in the tender documents is not the complete picture at all. The insurance annex typically includes text (sometimes complex) - and obligates various important conditions regarding the required policy content, conditions for notification and adverse changes to the policy, payment of insurance benefits, the status of the certificate requester, and more.In light of the above, the agent's and underwriter's work is not limited to delivering the uniform insurance certificate for the insurer's signature, but requires dedicating attention, carefully reading the insurance annex, and extracting from it all those matters that are not expressed in the coverage codes, but must be written in the policy itself. |
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