The growth in global development has resulted in an unparalleled increase in the value of property risks and the creation of new, previously unknown risks. And the insurance market in the Arab Republic of Egypt, Saudi Arabia and the Arab world is like any global market in which insurance companies tried to pursue the rapid development that took place in industrial and urban activity by issuing engineering insurance documents, especially insuring all the risks of contractors, insuring machinery malfunctions and insuring the loss of profits resulting from machinery malfunctions. … etc from the insurances that cover indirect losses that face commercial or industrial establishments, such as work stoppage insurance, additional expenses insurance, rent insurance, rental value, as well as the rent difference calculated … etc.
Definition of engineering insurances:
Engineering insurances are a group of property and civil liability insurance that aims to protect various industrial projects, whether constructive, transformative, or extractive from material losses arising from damages that may be exposed to machinery, equipment, devices, installations and buildings, whether in the stage of construction and experiments or in the stage of actual operation .
It also aims to protect against material losses arising from the liability of contractors and project owners before others. In view of the modern industrial and automated development, the insurance industry has realized the extent to which projects need a cover that protects the national economy from dangers whose importance has emerged with this successive development.
That is why the insurance industry is working hard to provide most of the guarantees necessary to cover these projects in all their stages from the start of construction and construction until the end of the experimental phase and the entry of these projects into the actual production stage, in addition to covering the operational phase of these projects.
Types of Policy and Coverage, and as is evident in the title of this article, it is devoted to discussing one type of engineering insurance, which is insurance against all risks of contractors :
Contractors All Risks Insurance:
Insurance covers all risks of contractors all losses that occur to civil engineering and architectural projects, it is necessary to issue various documents cover to the contractor to cover the dangers of fire, theft, civil liability and others. This insurance is issued to cover all these risks, and insurance for all the risks of contractors does not need to be renewed annually. It covers the entire period of contracting implementation.
The amount of insurance in the insurance for all risks of contractors:
The amount of insurance in insurance for all risks of contractors contains various items, the sum of which is the amount that is determined in the policy cover for this type of insurance. These items are:
1. The value of the contracting.
2. Temporary work (facilitate the task).
3. Work equipment.
4. Construction machinery.
5. The maximum amount for civil liability insurance.
6. Lifting the rubble.
Duration of insurance in insurance for all risks of contractors:
The duration of the cover in the insurance coverage for all risks of contractors is divided into two main parts, for which the insurance cover differs completely. 1. The first period The construction period starts from the contractor’s inception to carry out contracting work until the contracting receives the initial receipt. And the cover is from all risks. 2. The second period The maintenance period starts from the end of the first period and ends with the approval of the project owner to work permanently, and the cover is limited to accidents that result from maintenance work.
The type of risks in the insurance cover for all risks of contractors:
It is divided into two parts:
1. The first section:
It contains the dangers of force majeure that cannot be controlled. Rather, the severity of these dangers can be reduced by means of prevention and prevention of losses and dangers such as rain, citations, winds, storms and earthquakes.
2. The second section:
It contains the dangers that occur as a result of controllable factors such as total or partial subsidence, side movements of the soil, neglect, theft, fire, legal hazards, and the dangers of civil liability.
Exclusions in insurance for all risks of contractors:
Although this type is called insurance against all risks of contractors, there are many exceptions in this type, and they differ from one country to another, so you must return to the insurance company in the country in which you are located. These exceptions are divided in many countries into:
1. This type of insurance excludes loss or damage that results directly or indirectly from wars, aggression, civil war, revolutions, subversive activity, riots and terrorism and may cover the risk of riots and civil unrest with an additional premium as well as excludes Damage resulting from nuclear interaction and radioactivity. Damage resulting from confiscation or seizure of insured funds for military purposes or government orders is excluded.
2. This type of insurance excludes loss or damage that results directly from mechanical or electrical failure or defect, damage that occurs as a result of non-use, negligence or rust, damage resulting from works contrary to the applicable engineering rules, damage resulting from stopping work in If it is partial or complete.
3. Other exceptions where it excludes damage, damage or loss to files, maps and documents, and also excludes any loss incurred by building materials whose loss is discovered when carrying out an inventory. Fees for correcting the defective design are excluded, as well as insurance excludes fees for the repair of defective materials and also excludes consequential loss such as penalties imposed on The contractor also excludes losses that occur to machinery licensed for use on roads outside the work site.
4. Exceptions for third parties, where accidents that result directly or indirectly for machines licensed for use on roads outside the work site are excluded. Liability for employees and users who work for the insured is also excluded. Liability that has been agreed upon in an agreement form is also excluded, unless this liability is It is the responsibility of the insured.
Evaluation of the engineering insurance policy for all risks of contractors:
1. As for coverage:
The policy covers the contractor’s liability only before others (excluding the owner) for material or bodily damages sustained by him during the period of carrying out the works and the coverage ends at the end of this period or on the date of delivery of the building, whichever is first and it is more appropriate for the coverage to cover the liability of the contractor and the owner and to have a warranty period after Construction delivery.
2. With regard to having a tolerance:
The Contractor’s All Risks Policy stipulates that there is a deductible bearing whatever the type of accident, in order to avoid insurance companies (small and frequent accidents, which lead to increased expenses).
3. Design Error:
The document does not cover all the risks of contractors in Egypt and Saudi Arabia, the error in the design. It was necessary for the document to provide for the design error in which both the engineer and the contractor fall, by analogy with the documents of doctors and surgeons.
In world, a new insurance policy appeared under the title of Construction Guarantee Insurance , which covers the hidden defects of the building, which may appear after the completion of the construction for each of the works (building structure, water insulation, plumbing, electricity, mechanical works and interior finishes), and the period of the construction guarantee is ten years and the features of this document are close to The decimal insurance policy in Egypt with some differences, but we will not be able to write more details about this document, which was recently issued in Saudi Arabia, because until the date of writing this article, it has not been officially applied on the ground.
The difference between the engineering insurance policy for all risks of contractors and the decimal liability insurance policy
And a lot of people do not know the difference between the contractor’s all risks insurance policy and the ten-year policy, so we will shed light on the differences between them.
|The face of comparison||The decimal document||Document all contractor risks|
|Coverage||The ten-year document covers the civil liability of engineers and contractors, that is, damages to the owner of the building, as well as to others during the period of implementation of the works, for which the law has not specified a maximum number of years during which the construction process ends.The document also covers civil liability during the warranty period stipulated in Article (651) of the Egyptian Civil Code, and its period is ten years in the event of material accidents that affect the owner or physical or physical damage that occurs to others because of the complete or partial demolition of the building, or what is in it. From defects that threaten the durability and safety of the building.||The responsibility of the contractor is covered only before a third party (excluding the owner) for material or bodily damages that he suffers during the period of carrying out the works.|
|Civil responsibility||The ten-year document covers civil liability (material or physical), which the engineer and contractor are responsible for.||It is issued in its two sections together, the first – covers material risks to insured funds, and the second – covers material and physical civil liability.|
|Having a bearing||The decimal document does not provide for any bearing.||The Contractor’s All Risks document states in most cases that there is a deduction that will be deducted from all compensation, regardless of the type of accident.|
|Insurance price||The insurance price in the decimal document was set by Law No. 106 of 1976 Article No. 8 at a rate of (2 per thousand) of the value of the works contained in the building permits, regardless of the construction site, type or circumstances surrounding it, and this price is to cover the construction period + the guarantee period of 10 years according to the text Article 1H6 of the Egyptian Civil Code.||The price of liability insurance in the Contractor’s All Risks policy varies from one document to another according to the circumstances of each operation and to cover what the contractor is legally asking for about accidents that occur to others during the construction or installation period only.|
|Compensation||The owner of the building shall be compensated for the value of the loss that occurred to him, up to the maximum amount of the security, and the amount of insurance is the value of the building licensed to construct it only and which is registered with the building permit.The maximum amount that the insured pays for material and bodily damages that afflict others is one million pounds for a single accident, provided that the liability of the insured to one person for bodily damages does not exceed an amount of one hundred thousand pounds.||Compensation according to what has been agreed upon between the insurance company and the contractor and mentioned in the policy schedule and after deducting the agreed deductible amount from each compensation.|
|Deposit amount||It is the value of the building licensed to construct it only and which is registered with the building permit.||It is the value of the contracting contract that includes the value of the materials used by the contractor and provided by him or the owner and the value of his workers’ wages throughout the construction period in addition to the replacement value of construction equipment and construction machinery and the cost of removing rubble and dirt.|
|Design error||It covers the design error in which each engineer or contractor falls, so it can be considered as professional liability documents such as those sold to doctors and surgeons.||It does not cover the design error because it originally covers the contractor’s property from all risks, and then it is added to it (and may not be added) to cover his liability before others, excluding the owner.|