Checklist for Construction Exposure Insurance
A construction exposure insurance checklist represents a key tool for contractors to accurately gauge the extent of both their current insurance coverage and future needs. The checklist is also useful to have when interviewing brokers and comparing policies, and to determine efficient, affordable ways to meet employee, client and regulatory requirements. Given the complexity of insurance offerings and the various additional riders that may be necessary, the checklist is a prudent first step.
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Equipment
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Construction equipment can range from huge cranes to small stone picks. Insurance coverage must be adequate to protect all concerned against accidents that can happen to the most skilled workers. Policies should cover equipment on job sites, parked in lots and when going to and from jobs. Coverage should also include rented as well as owned equipment, and provide blanket protection whenever possible, as opposed to specific problems that may not be comprehensive. Replacement costs versus original prices should be considered as well.
Risk
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Builders and construction managers carry significant risk that ranges from damage caused by floods, rain, freezing weather, pollution and sinkholes to inadequate scaffolds and foundations. Additional risks include time delays when equipment and supplies do not show up when promised, unanticipated regulatory changes or redesigns, and force majeure events such as tornadoes, earthquakes and lightning strikes. Construction exposure insurance checklists help to ensure coverage for these circumstances that could otherwise be overlooked.
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Property
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In addition to physical structures, construction exposure insurance should also cover any assets within the buildings, such as appliances, furniture and personal property, from either damage or theft. This aspect of coverage is particularly relevant during the later stages of construction, after the floors and walls have been finished and await the accoutrements of an office or personal living space.
Other Factors
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Construction exposure insurance may entail coverage for local, regional, national or worldwide projects, depending on the contractors' reach and project scope. Some policies will also extend coverage for when the property owner actually takes possession and accepts all work, rather than when the work is finished. This helps to ensure that potential problems occurring within that window do not deter successful completion. Checklists should also include a clause that calls for a 60- or 90-day notification of nonrenewal or cancellation.
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