Site Cessation: Contractors All Risk Insuranceon
Since the outbreak of COVID-19, there has been an increasing amount of site delays due to safety concerns, access to materials or a reduction in workforce. Insurers wordings for Contractors All Risk policies vary considerably but it is highly likely you will have a condition within your policy in respect of the cessation of works on a site.
Depending upon the insurer, the period on the policy could be anything from 30 days to 6 months and any time period in between. Essentially, the insurer must be made aware of any site that has ceased or is likely to cease trading for a time which exceeds the duration within the condition. Failure to declare is a breach in the conditions of the policy and could result in claims not being paid.
Whilst this condition gives the insurer the freedom to either continue cover on the same basis, add endorsements, increase excesses, reduce cover or even come off cover altogether, our discussions with our partner insurers since the COVID-19 pandemic suggests insurers are looking to be as lenient as possible around this condition. However, in the event of a loss, non-disclosure is still in breach of the policy conditions and could warrant a claim not being paid.
Obviously, some insurers have multiple policy wordings, where the above conditions could differ. However, the key factor to consider is that each insurer’s wording is different, and it is important to obtain some expert advice from your broker around these conditions, if your site has stopped progressing or has been delayed as a result of COVID-19.
For sites which have stopped temporarily, each insurer will require slightly different requirements to security on-site, which is increased when there is no on-site activity. The security requirements could also be affected by the current stage of the project, attractiveness of the materials on site, value of the project, the location of the project and what existing structures are involved.
However, you should anticipate that the typical minimum requirements an insurer is likely to request includes the following;
- Ensure that the site perimeter is secure with robust fencing able to withstand anticipated weather conditions during the shutdown periods
- Provide CCTV monitoring of the site perimeter and inside the site, preferably with PIR sensors and loudspeakers to warn trespassers
- CCTV to be linked to a manned 24-hour Alarm Receiving Centre
- Materials stored on site must not be left in areas susceptible to flood or poor weather
- Remove all waste
- Remove all oil or place in secure area
- Isolate all non-essential utilities
- Ensure fire detections systems are in place / installed and linked to a 24-hour alarm receiving centre.
The conditions mentioned above and the ongoing site security are fundamental factors and it is advised that you speak with your broker about your existing policies. If your broker is unable to assist, or if you have any queries, please don’t hesitate to get in touch with us today at Reich Construction.