Introduction To Construction Insurance South African Short Term Insurance Nqf5

Front 1

Two major groups of construction risk?

Back 1

Major Works: Under contract, Complex, High Value

Minor Works: No formal contract, Installations and replacements, The order sets the terms

Front 2

The need for construction insurance?

Back 2

Risk of loss or damage or damage to property: impact, weather, poor design, theft, fire.

Minor events can escalate to major losses

Front 3

Environmental conditions?

Back 3

Most important consideration in construction insurance

Front 4

Many hazards effecting a construction project are...

Back 4

Foreseeable, inevitable and expected

Front 5

The contractor should provide for these...

Back 5

in his pricing or listed as excluded costs per contract

Front 6

Relevant policy exception here:

Back 6

"costs for which the employee will not hold the contractor responsible"

Front 7

Indemnity should only...

Back 7

extend to: unforeseeable, unexpected, fortuitous or accidental

Front 8

Elemental perils:

Back 8

Earth, water, air & Fire. Conditions normal to the environment not eligibal for insurance - carried by employer or contractor

Front 9

EARTH 6 characterizations?

Back 9

1. Subsidence

2. Landslide

3. Collapse

4. Rockslide

5. Mudslide

6. Avalanche

Front 10

How could these be avoided?

Back 10

Contractor should be familiar with the geotechnics of terrrain

Underwriter can insure but must be well informed

Front 11

WATER 4 characterizations?

Back 11

1. Rainfall

2. Flood / Inundation

3. Snow

4. Frost

Front 12

2 categories of this natural occurrence (Rainfall):

Back 12

Normal: predictable and not indemnifiable

Excessive: contractor not expected to take preventative measures, terms used "excessive rainfall" associated with high winds

Front 13

5 Common causes of flood/inundation:

Back 13

1. Run-off water from high ground

2. Rivers, dams etc bursting banks

3. Water table

4. Other underground water

5. Damage to water pipes

Front 14

(flood/inundation) Runoff water from high ground 3 key points:

Back 14

1. Divert away from site

2. Divert to a control point on site

3. Indemnity only actions of damage occurs after these measures have been overpowered

Front 15

(flood/inundation) Water table 3 key points:

Back 15

1. Easily established or well known

2. Must be regularly monitored

3. Policy will not respond to dewatering costs even if the quantities exceed predetermined amounts

Front 16

(flood/inundation) Other underground water 3 key points:

Back 16

1. Shaft sinking and tunneling relevant activities

2. Precautions can be taken: grouting, freezing or pumping

3. No response for pumping costs - only damaged insured works (shaft etc)

(mud considered as water)

Front 17

(flood/inundation) Damage to high-pressure pipes 3 key points:

Back 17

1. Usually during road construction

2. Even though location identified before hand - not always found where meant to be

3. If there is a loss of compaction density, policy will respond (as with un expected excessive rainfall)

Front 18

(WATER 4 characterizations) 2: Snow 3 key points:

Back 18

1. Excessive water from melted snow

2. Low temperatures affecting materials (concrete and bitumen)

3. The predictable and anticipated applies here

Front 19

(WATER 4 characterizations) 3: Hail 3 key points:

Back 19

1. Each incident taken on its merits

2. Damage caused by seepage

3. Large hail unpredictable

Front 20

(WATER 4 characterizations) 4: Frost 3 key points:

Back 20

1. Similar effects fo snow (curing of materials)

2. Equipment can be damaged (radiators)

3. Contractor must take preventative measures before policy can respond (anti freeze)

Front 21

(Elemental perils) AIR, 2 issues?

Back 21

1. Lightning / atmospheric electricity: preventing personal working and damage equipment

2. Wind: tornado most destructive

Front 22

(Elemental perils) FIRE, 2 issues?

Back 22

1. Veld fires caused by lightning

2. Veld fires caused by glass litter

Front 23

SA Legislation relating to construction are: (6 examples)

Back 23

1. Occupational health and safety act OHSA

2. Housing consumers protective measures act 1998

3. The national building regulations and building standard act 1997

4. Council for built environment act 2000

5. Construction industry developments board

6. Mine health and safety act 1996

Front 24

SA Legislation relating to professionals in the construction invironment: (5 examples)

Back 24

1. The architectural profession act 2000

2. The professional and technical surveyors act 1984

3. The landscape architectural profession act 2000

4. The quantity surveying profession act 2000

5. The town and regional planners act 1984

Front 25

SA Legislation relating to professionals in the construction environment: (2 examples)

Back 25

6. The professional and technical surveyors act 1984

7. The engineering profession act 2000

Front 26

Sate when conduct or omissions in conduct may be actionable

Back 26

"Provided the remaining requisite elements of delict are met: fault, causation and damage"

Front 27

Vicarious liability?

Back 27

The acts of employees

Front 28

Employee?

Back 28

Contract of service - under instruction, little or no descretion

Front 29

Independent contractor?

Back 29

Contract for service - has discretion as to how the work is carried out

in cases where the employer is accused of liable actions the reasonable man test applies

Front 30

Name 5 basic insurance principles:

Back 30

1. Insurable interest

2. Indemnity

3. Proximate cause

4. Good faith

5. Subrogation