A project-specific policy covers any risk a contractor is likely to face while working on a particular construction project. It is a policy protecting the interests of all those involved in the project. There are various types of risks a contractor faces while working on an Exploring Project Specific and all these cannot be covered or compensated by ordinary insurance policies.
So, a project-specific insurance program creates a sense of security to the insurance taker as it eliminates all possible risks from, Errors In Estimation, Technology risks, Time risks to Scope risks, Cost risks, Resource risks, and so on.
Kinds of Project Specific Insurance policies:
Insurance for Plant, Machinery and Other pieces of equipment
Project Specific Construction Insurance Companies provide security against liability for damage to or loss of the fixed assets like plant, machinery, and other assets such as materials used, any important documents, etc. This also provides insurance for the amount spent on demolition.
Third-Party Insurance policy
This type of program provides coverage of any sort of loss occurring to a third party as a result of the Contractor’s performance in the course of his work. It covers risks like loss, injury to, or even death of a third party.
Environmental Insurance Policy
Provides coverage for any kind of damage to property, injury, or hindrances in any clean-up program that occurred to a third party as a result of pollution caused in any form such as inappropriate disposal of materials, contamination of places, or exposure to dangerous materials in the course of the construction process or before it.
Political Risks Insurance Policy
This insurance program provides coverage for any loss or harm occurring to the plant, machinery, or equipment as a result of political strikes, protests, riots, well-thought political acts, or public disorder.
Employer’s Liability Insurance Policy
Provide coverage or compensation to the employees of the contractor for all the expenses or losses as a result of any injury, sickness, damage, or even death caused in the course of their employment under the contractor.
Why Is It Important for the contractors?
This policy by eliminating all types of construction-related risks becomes an attractive as well as an important tool that all contractors take to work with confidence around a secure environment.
Some of the reasons why contractors go for specific project insurance:
- Sometimes the contractors require much more coverage, than what their ordinary practice policies would offer to cover.
- The contractors might not be getting coverage for certain types of risks that their normal practice policies do not include like, lead, damage to reputation, etc.
- Maybe the contractors are working on a project involving high risks and they do not wish to take the risk of relying on normal practice policies with many limits imposed.
So, basically, a project-specific policy provides coverage for all types of losses to a contractor that their normal practice policies, generally, would not. Therefore, these serve as replacements to the normal practice policies, replacing them with their wide risk-coverage clauses.