I N V E S T
&
d e v e l O P
SANTAM
REAL ESTATE
SCHEME
DEVELOPMENT INSURANCE
Santam's seamless insurance product continues to receive enthusiastic support from
developers and development financiers alike.
There are a number of hurdles and challenges in the long process
of bringing specialised developments like shopping centres, office
and industrial developments, hotels and conference centres,
schools, hospitals, and large-scale residential developments to
successful completion. It was to ease the negotiation of some of
these hurdles that Santam created its developer-specific seamless
insurance. This consists of two complementary elements – the
Real Estate Scheme Development Insurance and the Equity
Guarantee for Property Developers.
In essence, the Equity Guarantee provides financiers with the
security of knowing that their loans will be backed by insurance
cover against delivery risks like abnormal cost overruns or non-
completion, and the property will be income-generating at the
end of the development period, while the Real Estate Scheme
Development Insurance provides cover against construction
activities and partly completed structures even before final
occupation. By combining these products, Santam insures both
the equity and the contract work.
Head of Santam Specialist Real Estate, Karl Bishop, explains
that – in the past – developers typically had to take out different
insurances to cover construction work, project liabilities, and –
once buyers or tenants move in – the structures themselves.
But that means different policies from different insurers, so who
pays for what when a claim arises?
‘Santam Real Estate Scheme Development Insurance, which
covers all aspects of the project, removes that worry by offering
developers peace of mind, as well as the benefits of price and a
seamless service,’ he says.
Equity Guarantee for Property Developers
The Equity Guarantee for Property Developers guarantees the
equity contribution (or a portion thereof) that financiers usually