All-Risk Insurance in Construction Guide
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ScribdTranslationsAll-Risk Insurance in Construction Guide
Translated by
ScribdTranslationsAll Risk Policy in
Construction
By: Juan Sebastián Tamayo Ángel
Comprehensive Construction Insurance
It belongs to technical or engineering insurance.
Temporary insurance, adjusted with the execution schedules, the hand
Human work is involved all the time.
Its main purpose is to cover losses or damages to the work.
(including the assets used).
As it is all risk, anything not stipulated as exceptions,
will be covered by insurance
The insurance is valid DURING its construction process.
Insurable Works
Residential and industrial buildings
Religious and cultural buildings (churches, universities, theaters, among others)
Hydraulic Works (aqueducts, dams or dikes)
Infrastructure works (roads, railways, and airport runways)
Underground works (Tunnels, mines, subways)
Port Infrastructure (Ports and Docks)
Bridges
Other Structures (Hospitals, airports, parks, generators
energy, hotels, among others
All-Risk Insurance in Construction
Provides the possibility to insure the machines or equipment used in the
construction. (As long as the conditions are known for the
tool)
When partial losses occur, the insurance will take care of the
necessary repairs to leave the equipment/item in good condition
similar to the beginning of the insurance validity
Insured (those who can apply for this
sure
Owner
Contractor
Project financer
Beneficiaries
Creditors
Contractors
Owner
Amparos
Amparo A (Basic)
Ampara
Material damage
Human Errors
Technical Failures
Qualified Theft
External Events
All the protections are during the construction phase.
The most basic insurance there is
It depends on the cause of the damage to know if it is compensable.
Insurable Causes (Protection A)
Negligence caused by a construction employee (Does not include the
employee using explosives
Theft (only up to the limit stipulated by the policy)
Negligence
Ray
Accidental fire (if it is caused, it is not covered)
Short circuit
Aircraft Crash
Optional Coverage
They are additional protections to the basic protection.
They will only be covered if at the time of obtaining the insurance it remains
stipulated, but a payment of an additional premium
If not stipulated, they will remain as exclusions.
Optional Coverage
Amparo B: Earthquake, tidal wave, tsunami or volcanic eruption.
Floods, cyclones, hurricanes, winds or landslides.
Amparo D: Maintenance (losses incurred during the period
of maintenance)
Amparo: Uprising, riots, civil or popular unrest, strikes,
vandalism or terrorism.
(Additional coverage offered by Seguros del Estado S.A)
Additional Amparos
The coverage offered by the insurance company increases.
An additional cost must be paid for each additional amparo.
Additional Protection
Amparo E: Extracontractual civil liability for material damages
Amparo F: Extracontractual civil liability for personal damages
The insurance company will pay the legal costs if there are any.
third party claim against the work.
Amparo G: Debris removal
Exclusions
War
Intent or gross negligence
Nuclear Accidents
Work Stoppage
Wear of tools due to lack of use or exposure to the elements
Damage in transport
Errors due to design of calculations
Damage caused by the omission of the recommendations from previous studies
data
Simple Theft
Fines for pollution
Additional costs caused by a change in the project schedule
Uninsurable Goods
Sowings of all kinds
Murals
Information needed to obtain the policy
Insured or Owner Information
Plans
Soil studies
Certificate of residency
Validity and schedule of the work
Contractor experience
Project value
•Amparos Solicitados
Insured Value
Insured Value = 100% Project Value
Project Value = Work Budget + Direct Costs + Costs
Indirect
Compensation
Partial losses
Lost Value - Deductible* = Compensation
Total Losses
Real value of the property at the time of the event - Deductible* =
Compensation
Deductible: "The amount or percentage of damages or loss that is compensable.
which is invariably deduced from this and therefore always remains
the insured's responsibility." (Liberty, 2013). The percentage is agreed upon beforehand.
to become effective the insurance.
Compensation for Total Loss in
machinery
Cost of All Risk Insurance in Construction
Basic Insurance Value = 0.35% Direct Cost of the work
(Data provided by engineer Alexandra Naranjo)
Example
Direct cost of the work = 1,500,000,000 COP
Insurance Cost = 1,500,000,000 COP * (.35%/100%) = 5,250,000 COP
References
All Risks Construction Insurance Policy for Contractors
Liberty Seguros S.A, 2013
ALL RISK CONSTRUCTION INSURANCE FORM 11/29/2016–1329–
P–12–ETRC001A, State Insurance, 2016
Comprehensive insurance in construction an opportunity for the
Colombian insurance market, Fernando Lombana Silva, Magazines
Javeriana, January 2015.