SA Affordable Housing November - December 2019 // ISSUE: 79

FEATURE at levels such that the insurance losses and insurance- related expenses do not exceed the total premium income of the insurer. When you claim on an insurance product, your premium might increase after you claim or you might lose a no-claims bonus, or in the worst case, the insurer might not offer you future cover if you have a very high claims history. However, the insurer does not have the right to recover the full amount of the insurance claim from you – unless there was a fraudulent claim. Your ongoing contributions to the insurance scheme provides the insurer enough ‘comfort’ to continue to provide the insurance cover for you. In the event that you stop paying your premiums, your cover may be suspended or cancelled in terms of the policy wording.” Hughes says there are five policies that a contractor should consider. “These are a Contractors All Risks Policy, a Multiperil Commercial Policy, a Plant All Risks Policy, Machinery Breakdown Policy and a Performance Guarantee.” "Everyone employed on a site must have Public Liability, as an incident can happen to anyone." CONTRACTORS ALL RISKS (CAR) “This policy is an All Risk policy covering you or, by written contract, your sub-contractors, onsite during the course of construction. Cover can be arranged on a once-off basis. Cover is based on the value and risk profile of that specific project. The cover will end when the project is complete. Alternatively cover can be arranged on an annual basis. Annual polices are slightly more comprehensive than the once-off cover. You’ll be quoted on your company’s annual projection figures and maximum contract value. An Annual CAR policy will cover all projects your company undertakes for 12 months are based on your annual turnover. The annual policy is more cost-effective option.” What is covered (main inclusions): • Physical loss or damage to the insured property. The Contract Works should cover the full replacement value of the work being undertaken, that is the cost of rebuilding at today’s prices. Included hereunder is Free-Issue Material: • Surrounding property • Inland transport • Maintenance • Testing and commissioning • Removal of debris • Off-site storage • Public liability • Removal of support • Loss of profits What is not covered (main exclusions): • Tools and equipment 22 NOVEMBER - DECEMBER 2019 SAAffordHousing • • • • • • Property belonging to sub-contractors Faulty design or workmanship Vehicles Professional Indemnity cover Consequential loss Non-performance or project delays MULTI-PERIL COMMERCIAL POLICY This policy covers the business assets of the construction company against perils such as fire, special perils, business interruption, theft, public liability to name a few. A Commercial Policy is structured according to one’s unique needs. Covers that should be considered are: • Property cover – covering buildings from fire and perils; • Fire cover – for fixtures and fittings, stock, plant and machinery; • Business Interruption cover - helps replace lost income following an insured event where one’s business is unable to operate. This cover helps replace lost profit, wages or rental income that results from things like fire or storm damage; • Theft cover – covering the theft of stock; • Business All Risks – covering tools and non- motorised equipment from theft and damage; • Electronic equipment cover – covering electronic devices from theft and damage; • Motor – covering sedans, LDV’s, trucks as well as special types; • Goods in transit – covering one’s own goods in transit; • Employees’ liability – covering the contractor when their employee is injured at work and they are held liable. Importantly all employees should be registered in terms of the Workman’s Compensation Act as all claims need to be submitted to COID (Compensation for Occupational Injuries and Diseases) first; • Public Liability cover – helps protect your business from liability claims. This can include customer slip-and-fall accidents and damage to someone else’s property that your business causes. Extensions that Hughes recommends include: • Work away – most policy wordings automatically include this. This will cover employees when they are working away from the Insured premises; • Product liability; and • Defective workmanship. PLANT ALL RISKS POLICY This policy covers one for the loss of, and damage to, plant and equipment, whether it is owned or it's hired- in. What is covered (main inclusions): • Physical loss or damage to the plant item. Cover can be based on new replacement value or agreed value • Hired in costs – cover should be requested • Hired out costs – cover should be requested • Credit shortfall cover – cover should be requested • Public Liability – cover should be requested saaffordablehousingmag SA Affordable Housing www.saaffordablehousing.co.za

SA Affordable Housing November - December 2019 // ISSUE: 79 | Page 24