BUSINESS AND TRAINING 13
Insurers are specialised financial institutions who manage the risk associated with a process – be it building, driving a vehicle or suffering a loss resulting from a burglary, or from construction processes.
Users( owners, principal contractor) must deal with insurers through a broker.
The construction industry has changed over the last 20 years with the volume of information available via the cloud to any person on a site. Using a tablet / smart phone to access current design information has become normal but has also increased the risk that information may be hacked – requiring cyber insurance, an extension to the construction insurances.
Insurances – the insured party pays the monthly premium and is the beneficiary of any payouts.
The contract works insurance( CWI) or CAR( contractor’ s all risk policy) is a unique policy in the joint names of owner and the builder. If CWI is in the builder’ s name as part of annually renewable policy( paid retrospectively) covering all the builder’ s current projects such a policy is not project-specific and may not cover this project’ s perceived risks adequately. The owner may take out a project-specific CWI policy and pay the premium and is the beneficiary of any payouts for payment of remedial work at his / her discretion( i. e. defects are possibly not repaired by the builder who may have caused the problem).
A CWI policy usually includes the entire specified works by the principal and identified subcontractors and direct contractors bundled with a public liability policy and strike-riot-civil commotion or SASRIA cover, and a removal of lateral support extension, if applicable.
The insured must declare all relevant information to the insurer – new build or renovation, unoccupied or partially occupied, neighbouring properties that may be damaged, other neighbourhood challenges, founding conditions, conventional or novel construction methods or high-risk materials, design by contractor other than temporary works, imported items may require marine insurance while in transit to South Africa.
A copy of the original insurance policy held by the insured must be provided to the other party. It is good practice to note expiry / renewal dates in site meeting minutes.
Other insurances, not necessarily related to a construction contract, include:
• A Professional Indemnity policy provides limited cover for third-party data loss, but only as it relates to the providing of professional services.
• A Business Interruption policy requires physical damage to trigger the policy and incidents such as ransomware or hacking a server may reflect no physical damage.
• A Directors and Officers policy will likely be triggered after a cyber breach but won’ t cover the business interruption, incident response or liability damages suffered by the company.
As with all other construction activities, it is imperative that all policies, certificates and correspondence be systematically and securely filed for easy access should a claim arise. PA
“ The owner may take out a project-specific CWI policy and pay the premium and is the beneficiary of any payouts for payment of remedial work at his / her discretion( i. e. defects are possibly not repaired by the builder who may have caused the problem).”
November 2026 Volume 32 I Number 09 www. plumbingafrica. co. za