UNDERWRITING CRITERIA GENERAL INFORMATION - 1 NAME OF PROPOSER; RELATIONSHIP OF PROPOSER TO PROJECT;...
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UNDERWRITING CRITERIA GENERAL INFORMATION - 1 • NAME OF PROPOSER; • RELATIONSHIP OF PROPOSER TO PROJECT; • IS THERE A CONTRACTUAL RESPONSIBILITY TO INCLUDE THE INTERESTS OF OTHER PARTIES? • IF SO, NAME THESE PARTIES (SEE NEXT SLIDE); • LOCATION OF CONTRACT SITE; • DESCRIBE THE CONTRACT SITE TOPOGRAPHY; • RESULTS OF ANY GEOTECHNIC AND HYDROLOGY INVESTIGATIONS CARRIED OUT NAME(S) OF ENGINEERS; • DESCRIPTION OF PROJECT; • COPIES OF PLANS, SPECIFICATIONS AND APPLICABLE CONTRACT DOCUMENT CLAUSES WOULD BE OF PARTICULAR VALUE TO UNDERWRITER; • PARTICULARS OF ANY FREE-ISSUE MATERIALS TO BE PROVIDED TO THE CONTRACTOR AND VALUE THEREOF;
UNDERWRITING CRITERIA GENERAL INFORMATION - 1 NAME OF PROPOSER; RELATIONSHIP OF PROPOSER TO PROJECT; IS THERE A CONTRACTUAL RESPONSIBILITY TO INCLUDE THE
UNDERWRITING CRITERIA GENERAL INFORMATION - 1 NAME OF PROPOSER;
RELATIONSHIP OF PROPOSER TO PROJECT; IS THERE A CONTRACTUAL
RESPONSIBILITY TO INCLUDE THE INTERESTS OF OTHER PARTIES? IF SO,
NAME THESE PARTIES (SEE NEXT SLIDE); LOCATION OF CONTRACT SITE;
DESCRIBE THE CONTRACT SITE TOPOGRAPHY; RESULTS OF ANY GEOTECHNIC
AND HYDROLOGY INVESTIGATIONS CARRIED OUT NAME(S) OF ENGINEERS;
DESCRIPTION OF PROJECT; COPIES OF PLANS, SPECIFICATIONS AND
APPLICABLE CONTRACT DOCUMENT CLAUSES WOULD BE OF PARTICULAR VALUE
TO UNDERWRITER; PARTICULARS OF ANY FREE-ISSUE MATERIALS TO BE
PROVIDED TO THE CONTRACTOR AND VALUE THEREOF;
Slide 2
CONSTRUCTION HIERACHY PRINCIPAL EARTHWORKS CONTRACTOR PILING
AND SUPPORT SUB- CONTRACTOR CIVIL CONTRACTOR SITE SERVICES SUB-
CONTRACTOR STRUCTURAL CONTRACTOR ROOFING SUB- CONTRACTOR ELECTRICAL
& MECHANICAL CONTRACTOR LIFTS AND ELEVATOR SUB- CONTRACTOR
PROJECT MANAGER ENGINEERS AND ARCHITECT
Slide 3
UNDERWRITING CRITERIA GENERAL INFORMATION - 2 IS THE PROJECT A
TURNKEY PROJECT OR WILL IT BE TAKEN OVER IN SECTIONS WHEN COMPLETE;
WILL THE PROJECT BE GIVEN TO ONE CONTRACTOR OR WILL IT BE
FRAGMENTED IN OTHER WORDS WILL SEPARATE CONTRACTS BE AWARDED TO
CIVIL, STRUCTURAL, ELECTRICAL AND MECHANICAL CONTRACTORS; WILL SITE
PREPARATION INVOLVE BUILDINGS DEMOLITION IF SO, PROVIDE PARTICULARS
OF WORK ENTAILED, WITH PARTICULAR REFERENCE TO BUILDINGS AND
POTENTIALLY HAZARDOUS SUBSTANCES THAT MAY HAVE BEEN STORED; THE
OVERALL CONTRACT PERIOD FROMTO; A BAR CHART SHOWING VARIOUS
ACTIVITIES WOULD BE BENEFICIAL TO PREMIUM COMPUTATION; THE FULL
CONTRACT VALUE INCLUDING FREE-ISSUE MATERIALS; THE VALUE OF EACH
ENGINEERING DISCIPLINE; THE SECURITY PRECAUTIONS TO BE UNDERTAKEN
TO PREVENT THEFT, MALICIOUS DAMAGE ETC.;
Slide 4
UNDERWRITING CRITERIA CIVIL WORKS 1 THE VALUE OF CIVIL WORKS;
ANY SPECIAL PRECAUTIONS TO BE TAKEN IN VIEW OF GEOTECHNIC OR
HYDROLOGY FINDINGS; DESCRIBE THE FOUNDATIONS ESPECIALLY WHETHER
THEY INCLUDE PILES AND THEIR TYPE STRIP, RAFT ETC.; IS THE POLICY
TO PROVIDE FOR PILING, IF SO TYPE OF PILES ENVISAGED AND EXPECTED
DEPTH OF PILES; NAME OF PILING CONTRACTOR; PROVIDE THE DEPTH OF
EXCAVATIONS; TO WHAT EXTENT WILL THERE BE REMOVAL OF SUPPORT
(LATERAL AND/OR OTHERWISE) TO ADJACENT PROPERTY OR BUILDINGS; IF
TEMPORARY AND PERMANENT SUPPORT TO BE INSTALLED WHO WILL UNDERTAKE
THIS WORK; NAME THE SUPPORT CONTRACTOR; WILL THERE BE ANY ON-SITE
MANUFACTURE OR CASTING OF PRESTRESSED COMPONENTS;
Slide 5
UNDERWRITING CRITERIA CIVIL WORKS 2 PROXIMITY OF SITE TO SEA OR
INLAND WATERWAYS; IF A RIVER OR DAM PROVIDE THE 50 YEAR FLOOD
HISTORY, IS THERE A POSSIBILITY OF THE SITE BEING FLOODED FROM THIS
WATER SOURCE; DESCRIBE THE PRECAUTIONS TO PREVENT FLOODING;
DEPENDING ON HYDROLOGY REPORT, WHAT PRECAUTIONS ARE TO BE TAKEN TO
HANDLE THE INGRESS OF WATER, FROM AN UNDERGROUND SOURCE; ALSO, GIVE
DETAILS OF STANDBY PUMPING ARRANGEMENTS;
Slide 6
UNDERWRITING CRITERIA CIVIL WORKS 3 IF THE CIVIL WORKS
COMPRISES SHAFT SINKING TUNNELLING OR OTHER UNDERGROUND WORK THEN
DESCRIBE: THE DIAMETER OF THE SHAFT OR TUNNELL, THE PROPOSED DEPTH
OF THE SHAFT OR LENGTH OF THE TUNNELL AND WHETHER THE SHAFT OR
TUNNELL WILL BE LINED, THE PRE-EXCAVATION GROUND INTEGRITY
INVESTIGATIONS, A COPY OF THE REPORT WOULD BE NECESSARY PLUS THE
ENGINEERS RECOMMENDATIONS, PARTICULARS OF THE METHOD OF PROBING
AHEAD OF THE WORKING FACE DURING EXCAVATION IS A MUST; FOR ANY
RAISEBORING OR TUNNELL BORING WORK THE DIAMETER OF THE RAISEBORE
HEAD OR TUNNELL BORING HEAD MUST BE GIVEN PLUS DETAILS AS REQUIRED
IN THE SECOND THIRD AND FOURTH PARAMETER ABOVE.
Slide 7
PROBING AHEAD OF THE WORKING FACE THIS TYPE OF RADIAL DRILLING
AHEAD OF THE WORKING FACE IS TO IDENTIFY THE NATURE OF THE GROUND
CONDITIONS AND THE PRESENCE OF WATER TO BE EXPECTED AS THE TUNNEL
OR SHAFT CONTINUES SIDE ELEVATION END ELEVATION DRILLING OUTWARDS
30 TO 45 DEGREES FROM THE STRAIGHT LINE
Slide 8
UNDERWRITING CRITERIA STRUCTURAL WORKS THE STRUCTURE TO BE
DESCRIBED FULLY GIVING : THE TYPE OF THE STRUCTURE IE. FACTORY,
WAREHOUSE, OFFICE BLOCK, HOSPITAL OR TENEMENT BUILDING ETC., THE
NATURE OF THE STRUCTURE WHETHER IT IS OF CONCRETE, WITH BRICK
INFILLS OR A BASIC STEEL STRUCTURE WITH CONCRETE LANDINGS WITH
BRICK INFILL ETC., THE NUMBER OF BASEMENTS, DETAILS OF ANY
PROTOTYPE OR UNTRIED FEATURES EMBODIED IN THE DESIGN OF THE
STRUCTURE, WHETHER STRUCTURAL OR CONSTRUCTION METHOD. IS THE
SELECTED CONTRACTOR FAMILIAR WITH THIS METHODOGY, THE NUMBER OF
FLOORS, THE TYPE OF FINISHES, DETAILS WHEN ELECTRICALS AND
MECHANICALS WILL BE INSTALLED; DESCRIBE THE MEASURES TO PREVENT THE
STRUCTURE FROM FLOODING AND WHAT PUMPING ARRANGEMENTS WILL BE
PRESENT TO HANDLE THE INGRESS OF WATER.
Slide 9
UNDERWRITING CRITERIA ELECTRICAL & MECHANICAL WORKS
DESCRIBE THE ELECTRICALS AND MECHANICALS TO BE INCORPORATED INTO
THE WORKS IE BOILERS, POWER SUPPLY TRANSFORMERS AND SWITCHGEAR, AIR
CONDITIONING AND/OR MANUFACTURING MACHINERY EG TO MANUFACTURE
WIDGETS; WHETHER THERE ARE ANY UNTRIED FEATURES OR PROTOTYPES OR
WHETHER THE MACHINERY IS STANDARD OF THE SAME TYPE AND SIZE
CURRENTLY OPERATING IN MANY FACTORIES; GIVE PARTICULARS OF THE
INSTALLATION PROCESS AND TESTING METHODS; WILL PARTS OF THE
MACHINERY BE TAKEN INTO OPERATION BEFORE THE PLANT AS A WHOLE IS
COMMISSIONED, IN OTHER WORDS WILL THERE BE BENEFICIAL USE BEFORE
TAKE-OVER, IF SO, MUST INSURANCE CONTINUE AFTER BEING TAKEN INTO
USE? IS COVER TO INCLUDE ELECTRICAL AND MECHANICAL BREAKDOWN? IS
THE FEEDSTOCK INFLAMABLE OR IS THERE AN EXPLOSION HAZARD DESCRIBE
THE TESTING PROCEDURE PARTICULARLY THE RUNNING TEST AND SAFETY
PRECAUTIONS DURING TESTING
Slide 10
WHAT DETERMINES A PROTOTYPE OR UNTRIED FEATURE The cylinder on
the left is the standard cylinder that has been manufactured for
many years and has stood the test of time. All that has been done
to manufacture the cylinder on the right is to increase size,
otherwise, everything else is the same, thus it is a prototype with
untried features. Accordingly, the stresses and strains will be
multiples of the original. In other words a failure waiting to
happen.
Slide 11
UNDERWRITING CRITERIA MAINTENANCE PERIOD GIVE DETAILS OF THE
MAINTENANCE REQUIREMENTS OF THE CONTRACT, DOES THE CONTRACT CALL
FOR MAINTENANCE VISITS ONLY, LIMITED MAINTENANCE PROVIDING FOR
DAMAGE CONSEQUENT ON PRIOR DEFECTS OF MATERIALS, WORKMANSHIP,
DESIGN PLAN OR SPECIFICATION OCCURRING DURING CONSTRUCTION AT THE
CONTRACT SITE, WIDER FORM OF MAINTENANCE ALLOWING FOR DAMAGE
RESULTING FROM ALL PRIOR DEFECTS OF MATERIALS, WORKMANSHIP, DESIGN
PLAN OR SPECIFICATION; DOES THE CONTRACT ALLOW FOR SUBROGATION
RIGHTS IN THE EVENT OF DEFECTIVE MATERIALS, DESIGN, PLAN OR
SPECIFICATION OR OFF-SITE WORKMANSHIP.
Slide 12
GENERAL CONSIDERATIONS THIRD PARTY LIABILITY - 1 LIMIT OF
INDEMNITY (INCLUSIVE OR EXCLUSIVE OF EXTENSIONS R00,000,000;
PROPERTY DAMAGE EXCESS RISK LOCATION RELATIVE TO: ADJACENT
PROPERTIES EXISTING PUBLIC SERVICES OF WATER, SEWERAGE, ELECTRICITY
OVERHEAD LINES OR UNDERGROUND CABLES EXISTING PROPERTY ADJACENT TO
CONTRACT WORKS SITE IS THERE TO BE ANY BLASTING, IF SO, GIVE
DETAILS DEPTH OF EXCAVATION WILL THE EXCAVATION AFFECT THE SUPPORT
OF ADJACENT THIRD PARTY BUILDINGS EXPERTISE OF DESIGN ENGINEER AND
CONTRACTOR ARE THE WORKING METHODS STANDARD AND WILL THERE BE ANY
METHODS OF WORK UNFAMILIAR TO THE CONTRACTOR
Slide 13
GENERAL CONSIDERATIONS PUBLIC LIABILITY - 2 ONE MUST THEN
CONSIDER THE NECESSITY TO INCLUDE ANY OR ALL OF THE FOLLOWING
EXTENSIONS OF COVER: ARREST, ASSAULT, DISCHARGE AND DEFAMATION
EMERGENCY MEDICAL EXPENSES PREVENTION OF ACCESS LEGAL DEFENCE COSTS
TRESSPASS OR NUISANCE; REMOVAL OF SUPPORT (LATERAL OR VERTICAL)
COULD BE AN EXTENSION, HOWEVER THE TERMS OF THIS COVER DIFFERS
CONSIDERABLY FROM THE BASIC COVER, THUS IT IS DESIREABLE TO ISSUE A
SEPARATE SECTION OR POLICY. THIS COVER WILL BE DISCUSSED
SEPERATELY.
Slide 14
PREMIUM COMPUTATION CONTRACT WORKS GENERAL - 1 UNDERWRITING IS
A SCIENCE AND NOT MERELY A RULE OF THUMB; THE UNDERWRITER WHO
RELIES ON GUESSWORK MAY BE LUCKY FOR A PERIOD BUT WILL SOON COME
SHORT; ONE CANNOT ASSUME THAT A SINGLE RATE WOULD APPLY TO ALL AND
ANY PROJECT, NO MATTER HOW SLIGHT, THERE ARE ALWAYS DIFFERENCES
WHICH COULD MAKE A VAST DIFFERENCE TO THE RATE CHARGED; ACCORDINGLY
EACH RISK MUST BE UNDERWRITTEN ON ITS OWN MERITS AND PECULIARITIES
WITH EACH ASPECT BEING GIVEN INDIVIDUAL CONSIDERATION; WE THEN
CALCULATE INDIVIDUAL RATES FOR THE CIVIL, STRUCTURAL,ELECTRICAL
& MECHANICAL AND LIABILITY RISKS; NO, I AM NOT GOING TO GIVE
YOU BASIS RATES, BUT I WILL SUGGEST METHODS OF CALCULATION. THE
BASIS RATES ARE FOR EACH UNDERWRITING HOUSE TO DETERMINE
THEMSELVES.
Slide 15
PREMIUM COMPUTATION CONTRACT WORKS GENERAL - 2 IT MUST BE
APPRECIATED THAT PERILS OF THE ENVIRONMENT HAVE A DIFFERENT IMPACT
ON EACH OF THE CONSTRUCTION DISCIPLINES; FOR EXAMPLE, EXCESSIVE
RAINFALL MAY NOT BE AS CRITICAL TO A PARTLY CONSTRUCTED STRUCTURE
AS IT WOULD TO FOUNDATION EXCAVATIONS, ON THE OTHER HAND WIND MAY
NOT CAUSE MUCH DAMAGE TO AN EXCAVATION AS IT WOULD TO A STRUCTURE
NOT ENTIRELY BRACED OR STEEL BEING LIFTED INTO POSITION A FURTHER
PROBLEM WOULD BE WHEN A STRUCTURE IS NOT FULLY CLAD THUS CAUSING A
WIND TUNNELL WITHOUT ANY EXIT; FIRE IS A HAZARD MORE SERIOUS WHERE
THE BUILDING IS NEARING COMPLETION OR WHERE MACHINERY HAS BEEN
INSTALLED OFTEN PACKING MATERIALS ARE NOT REMOVED FROM SITE. FIRE
IS NOT THAT SERIOUS WHEN RELATED TO EXCAVATIONS OR FOUNDATIONS ONE
COULD EXPECT MINIMAL DAMAGE;
Slide 16
PREMIUM COMPUTATION CONTRACT WORKS CIVIL WORKS 1 It is usual
for there to be a specific rate % for each project type e.g..
ROADS, RAILWAY SYSTEMS, DAMS, SHAFT SINKING, AIRPORT
RUNWAYS/APRONS, TUNNELLING AND THE LIKE; THE APPLICABLE RATE X (SAY
2.5%) MUST THEN BE APPORTIONED TO RISK CATEGORIES, FOR EXAMPLE,
(THESE % ARE JUST AN ILLUSTRATION AND ARE NOT REALISTIC) STORM/WIND
45% FIRE/LIGHTNING/EXPLOSION 5% COLLAPSE/LANDSLIDE 40%
THEFT/MALICIOUS DAMAGE 10%; NEXT ONE MUST DECIDE ON THE EXTENT OF
THE RISK APPLICABLE TO EACH CATEGORY, THUS STORM AND WIND ARE 45%
OF 2.5%= 1.125% BUT THE WORK IS BEING UNDERTAKEN DURING THE DRY
SEASON THEREFORE THIS RISK IS REGARDED AS MINIMAL SAY 25% OF THE
NORM, OUR RATE FOR THIS PORTION IS THUS 25% 1.125% = 0.281%; THE
SAME CALCULATION IS CARRIED OUT FOR EACH OF THE OTHER CATEGORIES OF
THE RATE X;
Slide 17
PREMIUM COMPUTATION CONTRACT WORKS CIVIL WORKS 2 THE NEXT PART
OF THE CALCULATION IS TO TAKE INTO ACCOUNT THE PERIOD ON RISK, THIS
MAY NOT ONLY BE THE CONSTRUCTION PERIOD, BUT THE RISK MAY CONTINUE
UNTIL TAKE-OVER OF THE COMPLETED PROJECT AS IN THE CASE OF A
TURNKEY PROJECT; IT MUST BE REMEMBERED THAT IF TAKE-OVER IS TO BE
DELAYED UNTIL FINAL COMPLETION, THEN THE CIVIL RISK WILL BE EXPOSED
FOR A PERIOD THAT MUST BE DETERMINED (DURING CONSTRUCTION AND
THEREAFTER UNTIL TAKEOVER); FINALLY THERE MUST BE A CHARGE FOR THE
MAINTENANCE PERIOD DEPENDING ON THE NATURE OF MAINTENANCE COVER
REQUIRED IN TERMS OF THE CONTRACT; THE CUMULATIVE RATE IS THEN
APPLIED TO THE CIVIL PORTION OF THE CONTRACT VALUE TO PRODUCE A
PREMIUM.
Slide 18
PREMIUM COMPUTATION CONTRACT WORKS STRUCTURAL WORKS 1 There is
a specific rate % for each project type e.g.. RESIDENTIAL
BUILDINGS, OFFICE BLOCKS, HOTELS, HOSPITALS, SHOPPING MALLS,
BRIDGES, FACTORY PREMISES, WATER TOWERS CHIMNEYS AND THE LIKE; THE
APPLICABLE RATE X (SAY 1%) MUST THEN BE APPORTIONED TO RISK
CATEGORIES, FOR EXAMPLE, (THESE % ARE JUST AN ILLUSTRATION AND ARE
NOT REALISTIC) STORM/WIND 20% FIRE/LIGHTNING/EXPLOSION 30%
COLLAPSE/LANDSLIDE 35% THEFT/MALICIOUS DAMAGE 15%; NEXT ONE MUST
ONE MUST DECIDE ON THE EXTENT OF THE RISK APPLICABLE TO EACH
CATEGORY, THUS FIRE ETC. ARE 30% OF X(X BEING SAY 1%) (30%X)= 0.3%
BUT THE WORK IS BEING UNDERTAKEN OUT OF THE LIGHTNING SEASON AND
ALL PACKING MATERIALS ARE REMOVED FROM THE BUILDING THEREFORE THIS
RISK IS REGARDED AS MINIMAL SAY 20% OF THE NORM, OUR RATE FOR THIS
PORTION IS THUS 20% OF 0.3% =0.06%; THE SAME CALCULATION IS CARRIED
OUT FOR EACH OF THE OTHER CATEGORIES OF THE RATE X;
Slide 19
PREMIUM COMPUTATION CONTRACT WORKS STRUCTURAL WORKS 2 THE NEXT
PART OF THE CALCULATION IS TO TAKE INTO ACCOUNT THE PERIOD ON RISK,
THIS MAY NOT ONLY BE THE CONSTRUCTION PERIOD, BUT THE RISK MAY
CONTINUE UNTIL TAKE-OVER OF THE COMPLETED PROJECT AS IN THE CASE OF
A TURNKEY PROJECT; IT MUST BE REMEMBERED THAT IF TAKE-OVER IS TO BE
DELAYED UNTIL FINAL COMPLETION, THEN THE STRUCTURAL RISK WILL BE AT
RISK FOR AN EXTENDED PERIOD WHICH MUST BE DETERMINED ESPECIALLY IF
MACHINERY IS TO BE INSTALLED BEFORE TAKE-OVER OF THE COMPLETED
STRUCTURE THUS AN ADDITIONAL CHARGE FOR THE EXTENDED PERIOD AFTER
CONSTRUCTION IS WARRANTED; FINALLY THERE MUST BE A CHARGE FOR THE
MAINTENANCE PERIOD DEPENDING ON THE NATURE OF MAINTENANCE COVER
REQUIRED IN TERMS OF THE CONTRACT; THE CUMULATIVE RATE IS THEN
APPLIED TO THE STRUCTURAL PORTION OF THE CONTRACT VALUE TO PRODUCE
A PREMIUM.
Slide 20
PREMIUM COMPUTATION CONTRACT WORKS ELECTRICAL & MECHANICAL
WORKS - 1 UNLIKE CIVIL AND STRUCTURAL RATING, THE ELECTRICAL AND
MECHANICAL RATE IS BUILT UP OVER A NUMBER OF FACTORS, THESE ARE:
HANDLING AND STATIC TESTING TESTING AND RUNNING FIRE AND SPECIAL
PERILS DURING CONSTRUCTION FIRE AND SPECIAL PERILS DURING TESTING
ENVIRONMENT BENEFICIAL USE IF REQUIRED IN TERMS OF CONTRACT
MAINTENANCE ONCE AGAIN BASED ON THE REQUIRED COVER; EACH OF THESE
RATE COMPONENTS HAS ITS OWN SPECIFIC RATE WHICH EXCEPT FOR THE
HANDLING AND STATIC TESTING RATE ARE ADJUSTED TO TAKE IN TO ACCOUNT
THE PARTICULAR PERIOD OF COVER AND RISK FACTOR. EACH OF THESE RATE
COMPONENTS ARE EXPLAINED AS FOLLOWS:
Slide 21
PREMIUM COMPUTATION CONTRACT WORKS ELECTRICAL & MECHANICAL
WORKS - 2 HANDLING AND STATIC TESTING: THIS RATE COMPONENT ALLOWS
FOR PRE ERECTION STORAGE ON SITE, MOVEMENT FROM STORAGE TO POINT OF
ERECTION, HOISTING ONTO FOUNDATIONS, ASSEMBLY THEN NON ENERGISED
TESTING TESTING AND RUNNING: IT IS AT THIS STAGE THAT POWER IS
FIRST APPLIED TO THE MACHINE AND FEEDSTOCK INTRODUCED. EFFECTIVELY
THIS COVER EQUATES TO MACHINERY BREAKDOWN COVER. THE PERIOD IS
USUALLY RESTRICTED TO 30 DAYS ON WHICH THE MACHINERY IS OPERATED
FOR TESTING PURPOSES. IT IS ASSUMED THAT ALL MANUFACTURERS SAFETY
REQUIREMENTS AND COMMISSIONING PROCEDURES WILL BE ADHERED TO AND
THAT SAFETY DEVICES WILL NOT BE OVERRIDDEN OR NULLIFIED. IT IS
USUAL THAT WHERE THERE ARE ANY UNTRIED FEATURES OR PROTOTYPES THAT
TESTING COVER WILL BE EXCLUDED; TESTING COVER IS USUALLY ONLY GIVEN
ON NEW MACHINERY;
Slide 22
PREMIUM COMPUTATION CONTRACT WORKS ELECTRICAL & MECHANICAL
WORKS - 3 FIRE AND SPECIAL PERILS: THESE RISKS ARE NO DIFFERENT TO
THOSE GIVEN UNDER A FIRE OR ASSETS POLICY, ACCORDINGLY, THE RATE
SHOULD BE SIMILAR TO THE STANDARD FIRE POLICY. THIS COMPONENT IS
DIVIDED INTO TWO CATEGORIES, NAMELY DURING CONSTRUCTION AND THEN
DURING TESTING AND RUNNING. A LESSER RATE SHOULD BE APPLIED TO THE
CONSTRUCTION PERIOD POSSIBLY 50% OF FIRE & PERILS RATE, WHEREAS
THE FULL RATE SHOULD BE APPLIED TO THE TESTING PERIOD. IN BOTH
INSTANCES THE RATE SHOULD BE ADJUSTED FOR THE PERIOD OF COVER;
ENVIRONMENT: THIS COMPONENT TAKES INTO CONSIDERATION THE RISKS OF
THEFT, MALICIOUS DAMAGE GEOTECHNIC AND HYDROLOGY RISKS AND A
VARIETY OF OTHER MINOR PERILS.
Slide 23
UNDERWRITING CRITERIA PUBLIC LIABILITY - 1 THIS SECTION OF THE
POLICY PROVIDES FOR LIABILITY TO THIRD PARTIES IN RESPECT OF LOSS
OF OR DAMAGE TO PROPERTY OR PERSONAL INJURIES OR DEATH OF PERSONS
NOT BEING EMPLOYEES OR THE FAMILY OF THE INSURED PARTY; WE ARE NOT
TALKING ABOUT A SEPARATE POLICY, BUT AS A SECTION TO A CONSTRUCTION
POLICY, THUS ANY LIABILITY INCURRED SHOULD ORIGINATE AT THE
CONTRACT SITE IN CONNECTION WITH SITE ACTIVITIES DURING THE PERIOD
OF INSURANCE; TO PROVIDE FOR ANY WIDER COVER A GENERAL LIABILITY
POLICY SHOULD BE TAKEN OUT IN THE ACCIDENT DEPARTMENT; THERE ARE
TWO BASES OF COMPUTING PUBLIC LIABILITY PREMIUMS EITHER ON: LIMIT
OF LIABILITY, OR CONTRACT VALUE; NEITHER BASIS CAN BE CONSIDERED
SUPERIOR TO THE OTHER, EFFECTIVELY THE PREMIUM SHOULD BE THE
SAME;
Slide 24
UNDERWRITING CRITERIA PUBLIC LIABILITY - 2 RECOGNISING THAT
THERE ARE TWO ACCEPTABLE BASES, WHAT FACTORS SHOULD BE TAKEN INTO
CONSIDERATION IN COMPUTING THE PREMIUM; ALL THOSE LISTED HEREUNDER
WILL EITHER BE PROMINENT IN THE PREMIUM CALCULATION OR OF LITTLE OR
NO EFFECT, EACH MUST BE CONSIDERED ON MERITS: IS THE SITE A GREEN
FIELDS OR BROWN FIELDS SITE, IS THERE A POSSIBILITY OF DAMAGE TO
EXISTING PROPERTY EITHER ON-SITE OR ON SITES ADJACENT TO THE
CONTRACT SITE, IS THE RISK LOCATION IN/OUT OF TOWN ARE THERE ANY
PUBLIC SERVICES IN THE VICINITY, ARE ANY EXPLOSIVES TO BE USED,
DEPTH OF EXCAVATION/ GEOTECHNIC RISKS, EXPERTISE AND TRACK RECORD
OF CONTRACTOR AND DESIGN ENGINEER, WORKING METHODS AND DESIGN, PLAN
OR SPECIFICATION, RISK MANAGEMENT; THE POTENTIAL RISK OF SPREAD OF
FIRE TO ADJACENT PROPERTIES EITHER ON SITE OR IN THE PROXIMITY
THERETO
Slide 25
UNDERWRITING CRITERIA THIRD PARTY LIABILITY - 3 EXTENSIONS OF
COVER ARE THE SELECTED EXTENSIONS OF COVER TO BE WITHIN THE OVERALL
LIMIT OF INDEMNITY OR ARE THEY TO HAVE SEPARATE LIMITS OF
INDEMNITY? IF SO, PLEASE PROVIDE THE REQUIRED LIMITS EXTENSION OF
COVER LIMIT OF INDEMNITY ARREST,ASSAULT, DISCHARGE OR DEFAMATION
R00,000,000 EMERGENCY MEDICAL EXPENSESR 000,000 PREVENTION OF
ACCESSR 0,000,000 LEGAL DEFENCE COSTSR 0,000,000 TRESSPASS OR
NUISANCER00,000,000
Slide 26
PREMIUM COMPUTATION PUBLIC (THIRD PARTY) LIABILITY - 1 THE
CALCULATION BEGINS WITH A BASIC RATE % WHICH IS A FUNCTION OF THE
LIMIT OF INDEMNITY WHICH ENVISAGES A 12 MONTH CONTRACT PERIOD, THE
BASIC RATE DIFFERS ACCORDING TO WHETHER IT IS TO BE APPLIED TO THE
CONTRACT VALUE OR THE LIMIT OF INDEMNITY; THE FIRST ADJUSTMENT
TAKES INTO CONSIDERATION THE PERIOD OF THE CONTRACT BY ADJUSTMENT
UPWARDS OR DOWNWARDS FOR LONGER OR SHORTER PERIODS FROM TAKE- OVER
OF SITE UNTIL FINAL HANDOVER OF THE PROJECT; THE NEXT ADJUSTMENTS
TAKE INTO CONSIDERATION THOSE PREVIOUSLY MENTIONED WHICH ARE AS
FOLLOWS:
Slide 27
PREMIUM COMPUTATION PUBLIC (THIRD PARTY) LIABILITY - 2 IS THE
SITE GREEN FIELDS OR BROWN FIELDS IS THERE A POSSIBILITY OF DAMAGE
TO EXISTING PROPERTY EITHER ON-SITE OR ON SITES ADJACENT TO THE
CONTRACT SITE; IS THE RISK LOCATION IN/OUT OF TOWN ARE THERE ANY
PUBLIC SERVICES IN THE VICINITY; ARE ANY EXPLOSIVES TO BE USED;
DEPTH OF EXCAVATION/ GEOTECHNIC RISKS; EXPERTISE AND TRACK RECORD
OF CONTRACTOR AND DESIGN ENGINEER; WORKING METHODS AND DESIGN, PLAN
& SPECIFICATION; RISK MANAGEMENT; FINALLY THE EXTENSIONS MUST
BE ADDRESSED:
Slide 28
PREMIUM COMPUTATION PUBLIC (THIRD PARTY) LIABILITY - 3 ARREST,
ASSAULT, DISCHARGE AND DEFAMATION, EMERGENCY MEDICAL EXPENSES,
PREVENTION OF ACCESS, LEGAL DEFENCE COSTS, TRESSPASS OR NUISANCE.
THE COMPUTATION OF THE REMOVAL OF SUPPORT RISK IS UNDERTAKEN ON
MUCH THE SAME BASIS, BUT THE BASIC RATE IS MUCH HIGHER THAN FOR
STANDARD LIABILITIES; WE HAVE NOT MENTIONED THE RISKS APPLICABLE TO
IMPLOSION OF BUILDINGS BEFORE NOW, HOWEVER, THESE ARE MUCH MORE
ONEROUS THAN ORDINARY LIABILITIES OR REMOVAL OF SUPPORT
LIABILITIES, BUT WE DO NOT BELIEVE THESE RISKS TO BE APPROPRIATE TO
THIS DISCUSSION.
Slide 29
PREPARING A QUOTATION IT IS IMPORTANT FOR THE UNDERWRITER TO BE
AWARE OF HOW THE QUOTATION IS PRESENTED, YOU LIVE BY YOUR WRITTEN
WORD, OR LACK THEREOF; CLEARLY, IF THE INTERMEDIARY HAS ASKED FOR A
CERTAIN EXTENSION AND THIS ASPECT HAS NEITHER NEGATIVELY NOR
POSITIVELY BEEN ADDRESSED, IT CAN BE ARGUED THAT THE REQUEST HAS
BEEN ACCEPTED; THE FOLLOWING SUGGESTED QUOTATION WORDING MAY ASSIST
IN EXPRESSING CLEARLY THE INTENTION; AS AN INTERMEDIARY YOU TOO
SHOULD DEFINE CLEARLY THE NATURE AND EXTENT OF COVER YOU ARE
REQUESTING, THE ONUS IS THEN ON THE UNDERWRITER TO ACCEPT OR REJECT
YOUR REQUEST BY WRITTEN COMMENT IN THE QUOTQTION PRESENTED.
Slide 30
SUGGESTED QUOTATION WORDING WORKS PLUS PUBLIC LIABILITY - 1 XYZ
INSURANCE COMPANY LIMITED (THE INSURER) 25 SUMMER PLACE, GLORIOUS
COVE INSURERS CONTACT PERSON:JOHN DOE TELEPHONE NUMBER:011 398 0000
E-MAIL [email protected] DATE OF QUOTATION:1 ST JULY, 2010
CLIENT: ABC MANUFACTURING LIMITED INTERMEDIARY: SMITH AND JONES
BROKERS - R SMITH INSURED PROJECT: NEW ELECTRIC MOTOR MANUFACTURING
FACILITY FOR ABC MANUFACTURING PROJECT VALUE: R25,500,000 CIVIL
WORKS R5,000,000 STRUCTURAL WORKS R7,500,000 ELECTRICAL/MECHANICAL
WORKS R10,240,000 PRELIMINARY & GENERAL R2,760,000
Slide 31
SUGGESTED QUOTATION WORDING WORKS PLUS PUBLIC LIABILITY - 2
POLICY WORDING: XYZ INSURANCE COMPANY LIMITED CONTRACT WORKS
WORDING OR ANY OTHER WORDING AS MAY BE AGREED BY THE COMPANY (XYZ
INS CO LTD) (THE INTERMEDIARY MAY HAVE SUBMITTED A POLICY WORDING
AS PART OF HIS QUOTATION REQUEST, YOU MUST COMMENT THEREON AS TO
ITS ACCEPTABILITY OR OTHERWISE AND REFER TO AN ACCEPTABLE WORDING)
THE INSURED PARTIES: THE PRINCIPAL: ABC MANUFACTURING LIMITED THE
SITE CONTRACTOR: MLM CONTRACTORS (PTY) LIMITED SUB-CONTRACTORS:
EMPLOYED ON THE CONTRACT SITE (EMPLOYED BY THE CONTRACTOR(S) OR
NOMINATED BY THE PRINCIPAL) BUT ONLY TO THE EXTENT OF LOSS, DAMAGE
OR LIABILITY ORIGINATING AT THE CONTRACT SITE ARISING OUT OF THEIR
SITE INVOLVEMENT EXCLUDING ANY PROFESSIONAL ACTIVITY OR OFF-SITE
MANUFACTURING OR MANUFACTURING GUARANTEES
Slide 32
SUGGESTED QUOTATION WORDING WORKS PLUS PUBLIC LIABILITY - 3 THE
INSURED PARTIES (CONTINUED): ANY OTHER NAMED PARTY PROPOSED TO AND
ACCEPTED BY THE INSURER SUCH AS PROJECT MANAGERS, MANUFACTURERS,
SUPPLIERS OR PROFESSIONALS BUT ONLY TO THE EXTENT OF LOSS, DAMAGE
OR LIABILITY ORIGINATING AT THE CONTRACT SITE, EXCLUDING ANY
PROFESSIONAL ACTIVITY OFF-SITE MANUFACTURING PROCESS OR
MANUFACTURERS GUARANTEES; BASIS OF INDEMNIFICATION: CONTRACT WORKS
LIMIT OF INDEMNITY THE INSURED PROPERTYR25,500,000 EXPEDITING COSTS
50% OF AGREED CLAIM EXCEEDING R100,000 OR WHERE LOSS DOES NOT
EXCEED R100,000 50,000 ESCALATION DURING CONTRACT PERIOD 15% DURING
PERIOD OF DAMAGE REINSTATEMENT 15%
Slide 33
SUGGESTED QUOTATION WORDING WORKS PLUS PUBLIC LIABILITY - 4
CURRENCY FLUCTUATION20% DEMOLITION AND DEBRIS REMOVAL ASSOCIATED
WITH DAMAGE TO WORKSR00,000,000 WITHOUT DAMAGE TO THE
WORKSR00,000,000 PROFESSIONAL FEESR 0,000,000 FIRE BRIGADE CHARGESR
0,000,000 PUBLIC AUTHORITIES CHARGESR 0,000,000 PUBLIC AUTHORITIES
REINSTATEMENTR 0,000,000 OFF-SITE STORAGE NOT AT MNFRS.R 0,000,000
WORK AWAYR 0,000,000 REMOVAL TO A PLACE OF SAFETYR 0,000,000
RECORDS AND PLANSR 0,000,000 CLAIMS PREPARATION COSTSR
0,000,000
Slide 34
SUGGESTED QUOTATION WORDING WORKS PLUS PUBLIC LIABILITY - 5
THIRD PARTY LIABILITY LIMIT OF INDEMNITY R00,000,000 INCLUDED IN
LIMIT OF INDEMNITY LEGAL DEFENCE COSTSR 0,000,000 EMERGENCY MEDICAL
EXPENSESR 000,000 TRESSPASS OR NUISANCER 0,000,000 ARREST ASSAULT
DISCHARGE DEFAMATIONR 000,000 WHERE A ZERO HAS BEEN PLACED OPPOSITE
AN ITEM THIS MEANS THAT NO COVER IS TO BE GIVEN FOR THAT ITEM. NOTE
TO UNDERWRITER THE LIMITS FOR THE EXTENSIONS SHOWN ABOVE ARE NOT
NECESSARILY SUB LIMITS INCLUDED IN THE OVERALL LIMIT OF INDEMNITY.
IF UNDERWRITTEN AS ADDITIONAL LIMITS THE WORDS INCLUDED IN LIMIT OF
INDEMNITY SHOULD BE OMITTED AND THE WORDS ADDITIONAL TO LIMIT OF
INDEMNITY ADDED
Slide 35
SUGGESTED QUOTATION WORDING WORKS PLUS PUBLIC LIABILITY - 6 THE
PROPERTY INSURED: THE PERMANENT WORKS BEING ALL WORKS AND PROPERTY
AS DESCRIBED IN THE CONTRACT DOCUMENTS AS THE CONTRACT WORKS AND
ANY TEMPORARY WORKS CREATED OR INSTALLED IN ORDER TO CONSTRUCT THE
PERMANENT WORKS; PERIOD OF COVER: COVER COMMENCES WITH THE HANDING
OVER OF THE CONTRACT SITE TO THE CONTRACTOR, OR THE DELIVERY OF
MATERIALS AND OTHER THINGS FOR INCORPORATION INTO THE PROJECT;
DURING ANY PERIOD OF STORAGE ON OR ABOUT THE CONTRACT SITE AWAITING
INCORPORATION, CONSTRUCTION OR ERECTION DURING ANY PERIOD OF
OFF-SITE STORAGE AT ANY SITE AGREED BY THE INSURER WHICH SHALL NOT
INCLUDE SUPPLIERS OR MANUFACTURERS PREMISES, WHILST BEING
CONSTRUCTED, ERECTED OR INSTALLED,
Slide 36
SUGGESTED QUOTATION WORDING WORKS PLUS PUBLIC LIABILITY - 7
PERIOD OF COVER: PERIOD OF COVER (CONTINUED): DURING ANY PERIOD OF
CONTRACTUAL BENEFICIAL OCCUPATION OF ANY COMPLETED OR PARTIALLY
COMPLETED WORKS DECLARED TO AND ACCEPTED (IN WRITING) BY THE
INSURER NOT EXCEEDING MONTHS DURING ANY CONTRACTUAL MAINTENANCE
PERIOD COVERING DAMAGE: OCCURRING DURING CONTRACTUAL VISITS BY THE
CONTRACTOR OR MANUFACTURER FOR THE PURPOSE OF CALIBRATION
ADJUSTMENT OR MAKING GOOD DEFECTS OR DAMAGE DUE TO CONSTRUCTION OR
ERECTION OR MAKING GOOD ANY DAMAGE DONE DURING SUCH CONTRACTUAL
VISITS DAMAGE DUE TO PRIOR DEFECTS OR DEFECTIVE CONDITIONS BUT
EXCLUDING THE DEFECTIVE CONDITION ITSELF, WHICH SHOULD FORM THE
SUBJECT OF A MANUFACTURERS GUARANTEE OR PROFESSIONAL
INDEMNITY;
Slide 37
SUGGESTED QUOTATION WORDING WORKS PLUS PUBLIC LIABILITY - 8 THE
DEDUCTIBLES: IN RESPECT OF EACH AND EVERY CLAIM ARISING OUT OF OR
IN CONNECTION WITH ANY ONE EVENT OR OCCURRENCE OR SERIES OF
OCCURRENCES ARISING OUT OF OR IN CONNECTION WITH ANY ONE EVENT, THE
INSURED SHALL BEAR THE FIRST: PERILEXCESS COLLAPSER0,000 STORM,
WIND, TEMPEST, FLOOD, SNOW, R0,000 HAIL, SLEET, FROST SUBSIDENCE,
LANDSLIPR0,000 DEFECTIVE DESIGN, PLAN,R0,000 SPECIFICATION FIRE,
LIGHTNING, EXPLOSIONR0,000 THEFT, MALICIOUS DAMAGER0,000
Slide 38
SUGGESTED QUOTATION WORDING WORKS PLUS PUBLIC LIABILITY - 9
RATE AND PREMIUM BASED ON CONTRACT VALUE: CONTRACT
WORKS0,00%R000,000 THIRD PARTY LIABILITY0,00%R 00,000 TERMS AND
CONDITIONS OF QUOTATION: 1.THIS QUOTATION HOLDS GOOD FOR 90 DAYS
FROM THE DATE SHOWN AS THE DATE OF QUOTATION; 2.THE QUOTATION IS
BASED ON THE UNDERWRITING INFORMATION SUPPLIED BY THE INTERMEDIARY
WHICH SHALL FORM THE BASIS HEROF EXCEPT AS EXCLUDED HEREIN SHOULD
THERE BE ANY CHANGES IN THE INFORMATION SUPPLIED THE COMPANY
RESERVES THE RIGHT TO AMEND THIS QUOTATION ACCORDINGLY; 3.THE
DEFECTS EXCEPTION ENVISAGED HEREBY IS THE COSTS ADDITIONAL DE5,LEG2
ETC.;
Slide 39
CONTRACTORS LIABILITIES A CONTRACTOR CAN INCUR LIABILITIES FROM
MANY SOURCES THUS HE NEEDS A PACKAGE OF LIABILITY COVERS OVER AND
ABOVE THAT GIVEN UNDER A CONTRACT WORKS OR CONSTRUCTION POLICY. IT
CAN EVEN BE SAID THAT A COMPREHENSIVE LIABILITY PACKAGE SHOULD
INCLUDE HIS POTENTIAL CONSTRUCTION RISKS LIABILITIES. ACCORDINGLY,
THE CONSTRUCTION POLICY SHOULD EXCLUDE THE CONTRACTORS LIABILITIES,
HOWEVER, WHERE OTHER PARTIES ARE INVOLVED ON THE CONSTRUCTION SITE
THEY MAY NEED TO BE COVERED FOR CONSTRUCTION LIABILITIES. THE
QUESTION THEN ARISES, SHOULD THE CONSTRUCTION POLICY WAIVE
SUBROGATION RIGHTS AGAINST THE CONTRACTOR?
Slide 40
CONTRACTORS LIABILITY POLICY -1 LET US EXAMINE THE RECOMMENDED
COMPONENTS TO A COMPREHENSIVE CONTRACTORS LIABILITY POLICY: IT IS
UNUSUAL FOR THIS TYPE OF POLICY TO BE UNDERWRITTEN IN THE
CONSTRUCTION OR ENGINEERING DEPARTMENT IT IS MORE AN ACCIDENT
DEPARTMENT RISK, FIRSTLY, WE MUST UNDERSTAND THAT THESE COVERS CAN
EITHER BE BASED ON CLAIMS MADE OR CLAIMS INCURRED THE FORMER BASIS
RECOGNISES THAT ANY CLAIM LODGED AGAINST THE INSURED DURIUNG A
PARTICULAR PERIOD OF INSURANCE, IRRESPECTIVE OF WHEN THE TRIGGERING
EVENT OCCURRED, SHALL BE REGARDED AS VALID AS LONG AS IT FALLS
WITHIN THE AMBIT OF THE POLICY, ON THE OTHER HAND ON A CLAIMS
INCURRED BASIS ANY CLAIM LODGED AGAINST THE INSURED MUST THEN
REVERT TO THE POLICY IN FORCE AT THE TIME THAT THE TRIGGERING EVENT
OCCURRED;
Slide 41
CONTRACTORS LIABILITY POLICY -2 THE FOLLOWING ARE THE MORE
COMMON SECTIONS TO A COMPREHENSIVE Contractors Liability Policy:
PUBLIC LIABILITY -GENERAL AND CONTRACTING LIABILITIES PRODUCTS
LIABILITY PRODUCTS MANUFACTURED OR SUPPLIED EMPLOYERS LIABILITY
INJURY OR SICKNESS ARISING OUT OF EMPLOYMENT, PROFESSIONAL
INDEMNITY BREACH OF PROFESSIONAL ACTIVITY OR DUTY, MOTOR EXCESS OF
LOSS LIABILITY DUE TO LOSS OR ACCIDENT DURING THE PERIOD OF THE
POLICY, PRODUCTS GUARANTEE LIABILITY FOR PRODUCTS SUPPLIED,
SOLD,INSTALLED ETC., PRODUCT RECALL WHERE SUCH PRODUCT MAY CAUSE
INJURY OR DAMAGE, CARRIERS LIABILITY DAMAGE ARISING OUT OF THE
CARRIAGE OF GOODS INCLUDING CONSEQUENTIAL LOSS,
Slide 42
CONTRACTORS LIABILITY POLICY -3 LIABILITY SECTIONS CONTINUED:
PLANT HIRE LIABILITY LEGAL LIABILITY FOR LOSS OR DAMAGE IN TERMS OF
A HIRE AGREEMENT INCLUDING CONSEQUENTIAL LOSS, PURE ECONOMIC LOSS
CLAIMS MADE DURING THE PERIOD OF INSURANCE OTHER THAN FOR
PROFESSIONAL SERVICES FOR COMPENSATION IN TORT, DELICT OR STATUTE;
THE EXTENSIONS OF COVER ARE SIMILAR TO THOSE UNDER THE MORE
SPECIFIC CONSTRUCTION POLICY LIABILITY SECTION; WHERE A MORE
SPECIFIC POLICY INCLUDING LIABILITIES HAS BEEN TAKEN OUT THE
CONTRACTORS LIABILITY POLICY WILL ONLY PROVIDE LIABILITY FOR
DIFFERENCES IN COVER OR LIMIT OF INDEMNITY, IT WILL NOT BE BROUGHT
IN TO CONTRIBUTION WITH THE MORE SPECIFIC POLICY;
Slide 43
CONSTRUCTION PLANT INSURANCE - 1 WHAT COMPRISES PLANT UNDER A
CONSTRUCTION POLICY? MOBILE PLANT AND EQUIPMENT: MOBILE CRANES,
CRAWLER CRANES, DUMP TRUCKS, BULLDOZERS, ROAD SCRAPERS, BACKACTORS,
EXCAVATORS, ROAD TANKERS (WATER, FUEL OR BITUMEN), ROAD ROLLERS;
NON MOBILE PLANT AND EQUIPMENT: CONCRETE BATCH PLANT, CONCRETE
MIXERS AIR COMPRESSORS, ELECTRICITY GENERATING PLANT, MINI SUB-
STATIONS, CONVEYOR SYSTEMS, TOWER CRANES, WELDING GENERATORS AND
TRANSFORMERS; MINING PLANT AND EQUIPMENT: DRAGLINES, EXCAVATORS,
JUMBO DRILL RIGS, MINING SCOOPS, DUMP TRUCKS AND MINE WINDERS LONG
WALL COAL CUTTERS, MINING SCOOPS AND TUNNELL BORING MACHINES;
Slide 44
CONSTRUCTION PLANT INSURANCE - 2 CLASSES OF OWNERSHIP:
CONTRACTORS WHO OWN PLANT FOR CONTRACTING WORK; PLANT OWNED FOR OWN
USE SUCH AS MINING OPERATIONS, INDUSTRIAL WORKS AND SERVICE
INDUSTRIES; PLANT HIRE COMPANIES FOR HIRE TO CUSTOMERS; VIRTUALLY
EVERY PROJECT REQUIRES PLANT OF ONE TYPE OR ANOTHER, LET US
CONSIDER THE VARIOUS CATEGORIES OF PLANT: CONSTRUCTION CONTRACTORS:
BUILDING CONTRACTORS CONCRETE BATCH PLANT, CRANES MOBILE, CRAWLER
AND TOWER, CONCRETE MIXERS, CONCRETE ESCALATORS, PUMPS CONCRETE AND
WATER, EXCAVATORS, BACKACTORS AND THE LIKE ROAD CONSTRUCTION
CONTRACTORS THESE CONTRACTORS USE A LARGE VARIETY OF PLANT SUCH AS,
SCRAPERS, EXCAVATORS, ROLLERS, BULLDOZERS, BACKACTORS, MOBILE
CRANES,AIR COMPRESSOR SETS, PAVING MACHINES ETC.;
Slide 45
CONSTRUCTION PLANT INSURANCE - 3 MINING OPERATIONS (MAINLY
OPENCAST): EXCAVATORS, DRAGLINES, JUMBO DRILLS, EARTH MOVING
TRUCKS, MINING SCOOPS, CONVEYOR SYSTEMS, CRUSHERS, CRANES,
COMPRESSORS, DIESEL GENERATING PLANT ETC. IN SOME INSTANCES THE
PLANT MAY INCLUDE MINE WINDERS OR TUNNELL BORING MACHINES; PLANT
HIRE COMPANIES: THEIR PURPOSE IS AS A SERVICE TO CONSTRUCTION,
MINING AND INDUSTRY, TO PROVIDE PLANT AND MACHINERY AS REQUIRED FOR
A VARIETY OF JOBS. SOMETIMES THESE HIRE COMPANIES ARE A DIVISION
WITHIN A CONSTRUCTION, MINING OR INDUSTRIAL COMPANY, THE PURPOSE OF
WHICH IS TO SEPARATE THE COSTLY AND ONEROUS OWNERSHIP OF PLANT AND
MACHINERY FROM THEIR CORE BUSINESS, WHETHER THIS BE CONSTRUCTION,
MINING OR OTHER INDUSTRIAL ACTIVITY;
Slide 46
CONSTRUCTION PLANT INSURANCE 4 THE NEED FOR INSURANCE THIS TYPE
OF PLANT & EQUIPMENT IS GENERALLY HIGH RISK, SUSCEPTIBLE TO
IMPACT, FIRE, THEFT AND ELEMENTAL PERILS. WE ARE NOT SUGGESTING
THAT THE USERS DO SO NEGLIGENTLY, CARELESSLY OR WITHOUT REGARD FOR
POSSIBLE DANGER OR DAMAGE. PLANT IS USUALLY OPERATED BY A DEDICATED
OPERATOR OR OPERATORS, THUS THE ONUS FOR ANY UNDUE OPERATION OF THE
PLANT RESULTING IN DAMAGE COULD BE PEGGED AT THE DOOR OF AN
INDIVIDUAL. IT MUST BE APPRECIATED THAT THIS TYPE OF PLANT HAS
LARGE QUANTITIES OF FUEL OIL AND HYDRAULIC OIL BOTH OF WHICH ARE
HIGHLY INFLAMABLE; DEPENDING ON THE TERRAIN IN WHICH IT WORKS
TOPPLING OVER OR OVERTURNING IS A VERY REAL RISK; IN VIEW OF THE
ELEMENT OF RISK WHICH IS HIGH & VARIED IT WOULD BE UNWISE NOT
TO INSURE THE PLANT.
Slide 47
CONSTRUCTION PLANT INSURANCE 5 THE INSURANCE POLICY COVER THE
COVER IS SIMILAR FOR ALL CLASSES OF OWNERSHIP AS THIS EQUIPMENT IS
ESSENTIALLY FOR OUTDOOR USE, IT QUALIFIES FOR WHAT CAN BE TERMED
ALL RISKS COVER. THIS DOES NOT MEAN THAT THERE ARE NO TERMS AND
CONDITIONS APPLICABLE TO THE INSURANCE, INDEED THERE ARE LIMITING
FACTORS TO THE COVER. THE COVER EMBRACES: ELECTRICAL AND MECHANICAL
BREAKDOWN (OPTIONAL COVER) FIRE LIGHTNING EXPLOSION ELEMENTAL
PERILS FLOOD THEFT MALICIOUS DAMAGE IMPACT COLLISION OVERTURNING
UNINTENTIONAL OVERLOADING
Slide 48
CONSTRUCTION PLANT INSURANCE 6 THE INSURANCE POLICY EXCEPTIONS
ALTHOUGH WE REFER TO THE COVER AS BEING ALL RISKS, NEVERTHELESS
THERE ARE SOME EXCEPTIONS THESE ARE AS FOLLOWS: WEAR AND TEAR AND
GRADUAL DETERIORATION; PENALTIES FOR DELAY AND GUARANTEES OF
PERFORMANCE; LOSS OF USE; TYRES AND TUBES; EXPENDABLE PARTS AND
TOOLS; THEFT NOT IDENTIFIABLE WITH A SPECIFIC INCIDENT; TANDEM OR
MULTIPLE LIFTS; EXISTING DEFECTS, WILFUL ACTS OR NEGLIGENT ACTS;
EXPERIMENTS OR INTENTIONAL OVERLOADING; WHILST BEING OPERATED BY A
PERSON: UNDER THE INFLUENCE OF INTOXICATING LIQUOR OR DRUGS,
AUTHORISED BY THE OWNER OR HIS RESPONSIBLE PERSON WHO IS NOT
QUALIFIED TO OPERATE THE PLANT ELECTRICAL OR MECHANICAL BREAKDOWN
(IF OPTION NOT REQUIRED);
Slide 49
CONSTRUCTION PLANT INSURANCE 7 HIRED-IN PLANT POLICY AMENDMENT
THE POLICY WORDING IS GENERALLY SIMILAR WHETHER COVERING OWNED
PLANT OR HIRED-IN PLANT, TO ACHIEVE THE ADJUSTMENT TO THE STANDARD
POLICY THE FOLLOWING MEMORANDA ARE INCLUDED: A) THE INSUREDS LEGAL
LIABILITY UNDER ANY HIRING AGREEMENT TO PAY COMPENSATION FOR
PHYSICAL LOSS OF OR DAMAGE TO ANY INSURED HIRED-IN MACHINERY WHILST
UNDER HIS CUSTODY OR CONTROL AT THE INSUREDS PREMISES DESCRIBED IN
THE SCHEDULE HERETO; B) THE INSUREDS LEGAL LIABILITY UNDER ANY
HIRING AGREEMENT TO PAY CONTINUING HIRE CHARGES IN CONSEQUENCE OF
PHYSICAL LOSS OF OR DAMAGE TO THE INSURED HIRED-IN MACHINERY
DESCRIBED IN THE SCHEDULE HERETO FOLLOWING INDEMNIFIABLE LOSS OR
DAMAGE PROVIDED FOR IN A) ABOVE; AS PREVIOUSLY STATED THE POLICY
REQUIRES THAT ANY HIRING AGREEMENT SHALL BE NO MORE ONEROUS THAN
THE CPHA CONDITIONS.
Slide 50
CONSTRUCTION PLANT INSURANCE 6 HIRED IN/OUT PLANT &
MACHINERY THIS PLANT AND EQUIPMENT IS HIRED IN/OUT UNDER SPECIFIC
HIRING CONDITIONS. INSURERS PREFER THE CONDITIONS AS PUBLISHED BY
THE PLANT HIRE ASSOCIATION KNOWN AS THE CPHA CONDITIONS. THE CPHA
CONDITIONS ARE CONSIDERED TO BE THE MOST FAIR FROM BOTH THE OWNERS
AND THE HIRERS POINTS OF VIEW. IN FACT, A POLICY COVERING HIRED
PLANT OFTEN INCLUDES A MEMORANDUN WHICH STATES: THIS INSURANCE IS
BASED ON HIRING AGREEMENTS NO MORE ONEROUS THAN THOSE PUBLISHED BY
THE CONTRACTORS PLANT HIRE ASSOCIATION, SHOULD PLANT HAVE BEEN
HIRED UNDER OTHER HIRING AGREEMENTS THEN ANY LOSS OR DAMAGE COVERED
UNDER THIS POLICY WILL BE ADJUSTED AS IF THE CPHA CONDITIONS HAD
BEEN IN FORCE
Slide 51
CONSTRUCTION PLANT INSURANCE 7 RISK ASSESSMENT THE INFORMATION
REQUIRED EMBRACES THE FOLLOWING: IS THE PLANT OWNED OR HIRED IN; IF
HIRED IN, THE APPLICABLE CONDITIONS OF HIRE; THE TYPE OF HIRED IN
PLANT AND THE HIRE CHARGE FOR THE PERIOD OF HIRE; WHETHER ANY HIRED
IN ITEM HAS A REPLACEMENT VALUE EXCEEDING R------ (NOT ALL INSURERS
REQUIRE THIS) FOR OWNED PLANT A FULL SCHEDULE OF PLANT TO BE
INSURED AND THE NEW REPLACEMENT VALUE OF EACH ITEM; DETAILS OF
TOWER CRANES AND OTHER CRANES OWNED OR HIRED IN TOGETHER WITH
COPIES OF THEIR LAST INSPECTION REPORT; WHETHER THERE ARE TO BE ANY
TANDEM OR MULTIPLE LIFTS, DETAILS THEREOF,INSURERS RESERVE RIGHT OF
EVALUATION; AGE OF ROPES AND SLINGS AND LATEST INSPECTION REPORT;
WHETHER LIFTING APPARATUS FITTED WITH LOAD GUAGES; CERTIFICATE OF
COMPETENCY OF CRANE OPERATORS; EXPERIENCE OF RIGGERS WHO WILL
CONTROL LIFTING; DETAILS OF LOSSES OVER LAST THREE YEARS.
Slide 52
CONSTRUCTION PLANT INSURANCE 8 CPHA HIRE CONDITIONS THE
FOLLOWING IS A RESUME OF THE CPHA HIRE AGREEMENTS THE HIRER MAY NOT
CEDE ASSIGN NOR SUBLET THE AGREEMENT IN ANY WAY; THE OWNER HAS AT
ANY TIME THE RIGHT OF ACCESS TO SITE TO EXAMINE THE HIRED-IN
PROPERTY; THE HIRER MUST ENSURE THAT OR AT HIS OWN COST CREATE A
SUITABLE WORKING TABLE FOR THE SAFE OPERATION OF ANY HIRED IN
CRANE, FAILING WHICH THE AGREEMENT SHALL BE NULL AND VOID; THE
HIRER IS OBLIGED TO NOTIFY THE OWNER OF ANY DEFECTS IN THE PLANT AT
THE TIME OF DELIVERY OR ANY DEFECTS THAT MAY DEVELOP DURING THE
HIRE PERIOD, THE PLANT SHALL CEASE TO BE USED, ANY DAMAGE THAT MAY
OCCUR DUE TO CONTINUED USE SHALL BE FOR THE COST OF THE HIRER; THE
PLANT IS TO BE USED ONLY WITHIN ITS RATED CAPACITY, IN THE CASE OF
CRANES NO TANDEM LIFTS, UNLESS AGREED TO
Slide 53
CONSTRUCTION PLANT INSURANCE 9 CPHA HIRE CONDITIONS THE OWNERS
OPERATOR BECOMES THE SERVANT OF THE HIRER WHO HAS THE ABSOLUTE
CONTROL OF HIS ACTIONS; RISK OF LOSS OR DAMAGE PASSES TO THE HIRER
ONLY ON DELIVERY TO SITE UNLESS THE HIRER HAS ARRANGED TRANSIT OF
THE PROPERTY TO SITE FROM THE OWNERS PREMISES IN WHICH CASE THE
HIRER IS RESPONSIBLE; THE HIRER INDEMNIFIES THE OWNER FOR ALL
LIABILITY ARISING OUT OF THE USE OF THE PLANT BY THE HIRER; THE
HIRER SHALL BE RESPONSIBLE FOR ON-GOING HIRE CHARGES DUE TO
INCLEMENT WEATHER OR NORMAL MAINTENANCE OR REPAIRING PUNCTURES AND
THE LIKE THE HIRER SHALL NOT BE LIABLE FOR ON-GOING HIRE CHARGES
DUE TO UNAVAILABILITY OF ANY OWNERS OPERATOR OR DUE TO BREAKDOWN
FROM INHERENT DEFECT; THE HIRER ACCEPTS LIABILITY FOR DIRECT &
CONS LOSS
Slide 54
CONSTRUCTION PLANT INSURANCE 10 CPHA HIRE CONDITIONS THE HIRER
IS RESPONSIBLE FOR THE INSURANCE DURING THE HIRE PERIOD; ANY BREACH
OF CONDITIONS OF THE AGREEMENT OR ACT OF INSOLVENCY OR BEING PLACED
UNDER JUDICIAL MANAGEMENT THE OWNER MAY REPOSSES THE PLANT ON HIRE
AND WILL BE ENTITLED TO THE HIRE FEES DUE FOR THE FULL AND
UNEXPIRED HIRE PERIOD; IN THE CASE OF CRANES AND MOBILE PLANT HIRE
FEES WILL BE BASED ON TIME SHEETS PREPARED BY THE PLANT OPERATOR
AND SIGNED BY THE HIRER; THERE IS NO OBLIGATION ON THE OWNER TO
SUPPLY SLINGS, IF THESE ARE SUPPLIED NO RESPONSIBILITY IS ACCEPTED
BY THE OWNER WHO HAS NO CONTROL OVER USE; TYRES AND TUBES ARE THE
RESPONSIBILITY OF HIRER; PLANT MAY BE RECALLED FOR REPAIR BY THE
OWNER.
Slide 55
EMPLOYERS LIABILITY - 1 EMPLOYERS LIABILITY: TO WHOM DO THE
EMPLOYERS HAVE A POTENTIAL RESPONSIBILITY TO PAY COMPENSATION FOR
INJURIES OR DISEASE DUE TO THEIR OCCUPATION,UNDER WHAT LAW: PRIOR
TO 1994 ALL EMPLOYEES EARNING LESS THAN A SPECIFIED AMOUNT,
SPECIFIED IN TERMS OF THE WORKMANS COMPENSATION ACT (WCA), WERE
CLASSED AS WORKMEN. THEY OR THEIR DEPENDANTS COULD CLAIM
COMPENSATION UNDER THE ACT, BUT HAD NO LEGAL RIGHT TO SUE THEIR
EMPLOYERS; THOSE WORKMEN EARNING IN EXCESS OF THE PRESCRIBED AMOUNT
WERE IN TERMS OF THE ACT CLASSED AS NON- WORKMEN NON WORKMEN WERE
PRECLUDED FROM CLAIMING COMPENSATION FOR OCCUPATIONAL INJURIES OR
DISEASE, UNDER THE WORKMANS COMPENSATION ACT, BUT WERE ABLE TO
CLAIM COMPENSATION FROM THEIR EMPLOYERS FOR SUCH INJURIES OR
DISEASE, ACCORDINGLY, MOST EMPLOYERS TOOK OUT EMPLOYERS LIABILITY
INSURANCE
Slide 56
EMPLOYERS LIABILITY - 2 IN 1994 THE COMPENSATION FOR
OCCUPATIONAL INJURIES AND DISEASES ACT (130 OF 1993) WAS
PROMULGATED, COMMONLY KNOWN AS THE COID ACT; IN TERMS OF THE ACT
ALL EMPLOYEES (THE BENEFITS ARE PEGGED TO BE A DEFINED INCOME
LEVEL) AND PRECLUDES EMPLOYEES FROM CLAIMING COMPENSATION FROM
THEIR EMPLOYERS FOR INJURIES OR DISEASE ARISING OUT OF THEIR
OCCUPATION, ONLY IN EXCEPTIONAL CASES WHERE EMPLOYMENT IS NOT
CLASSIFIED AS EMPLOYEES ARE THEY FREE TO SUE THEIR EMPLOYER FOR
COMPENSATION UNDER COMMON LAW FOR SUCH INJURIES OR DISEASES; THE
COID ACT DEFINITION OF EMPLOYEE INCLUDES APPRENTICES AND LEARNERS,
BUT NOT THOSE CONTRACTED TO CARRY OUT WORK FOR THE EMPLOYER OR
THEIR SUB-CONTRACTORS; CONSEQUENTLY EMPLOYERS LIABILITY CLAIMS ARE
RARE
Slide 57
EMPLOYERS LIABILITY - 3 UNDER A MODERN EMPLOYERS LIABILITY
POLICY, DEATH AND BODILY INJURY INCLUDES DISEASE OR ILLNESS. THIS
COVER IS UNLIKE PUBLIC LIABILITY POLICIES IN THAT PROPERTY DAMAGE
IS NOT INCLUDED; IT IS IMPORTANT TO UNDERSTAND THAT UNDER THE USUAL
EMPLOYERS LIABILITY, INJURY OR ILLNESS MUST OCCUR DURING THE PERIOD
OF INSURANCE. THE CLAIM MAY BE MADE AND THE INSURERS LIABILITY
ARISE MANY YEARS AFTER THE CAUSE OF THE ACTION, EVEN AFTER THE
ORIGINAL INSURER IS OFF RISK. THIS EQUATES TO A CLAIMS INCURRED
WORDING. THE INSURER WHO WAS ON RISK AT THE TIME THE CAUSE OCCURRED
IS THE INSURER RESPONSIBLE FOR THE CLAIM.
Slide 58
EMPLOYERS LIABILITY - 4 IT IS RECOMMENDED THAT THIS CHAPTER (8)
OF THE IISA CONSTRUCTION INSURANCE STUDY BOOK BE CAREFULLY READ THE
COID ACT PROVIDES FOR COMPENSATION FOR DISABLEMENT CAUSED BY
OCCUPATIONAL INJURIES OR DISEASES SUSTAINED OR CONTRACTED BY
EMPLOYEES IN THE COURSE OF THEIR EMPLOYMENT, OR DEATH FROM SUCH
INJURIES OR DISEASE. DISABLEMENT INCLUDES CONVENTIONAL BODILY
INJURY UNDER A CONVENTIONAL EMPLOYERS LIABILITY POLICY; DISABLEMENT
AS DEFINED BY COID MEANS TEMPORARY PARTIAL DISABLEMENT TEMPORARY
TOTAL DISABLEMENT, PERMANENT DISABLEMENT OR SERIOUS DISFIGUREMENT;
COID AFFORDS A MORE COMPREHENSIVE COVER THAN A NORMAL EMPLOYERS
LIABILITY POLICY. UNDER AN EMPLOYERS LIABILITY POLICY, THE EMPLOYER
HAS TO BE NEGLIGENT BEFORE A VALID CLAIM CAN ARISE. COID DOES NOT
REQUIRE NEGLIGENCE ON THE PART OF THE EMPLOYER. IT IS SUFFICIENT
FOR THE DISABLEMENT TO BE AS A RESULT OF AN ACCIDENT NOT
NECESSARILY DUE TO NEGLIGENCE. THUS COID HAS A WIDER
APPLICATION.
Slide 59
PROJECT 3 TO BE PRESENTED AT NEXT SESSION An Employee, let us
call him Joe, while working on a machine in the production shop
and, not wearing a safety belt slips and falls to the ground some 4
metres below and breaks his leg, it is a compound fracture. He is
incapacitated for six weeks while the bone heals, he cannot attend
work, but returns to work at the beginning of the seventh week,
although, the sore on his leg has not completely healed. Some three
weeks later, when the sore still has not healed he visits his
Doctor again and the Doctor identifies that gangrene has set in and
is at an advanced stage, unfortunately, the only remedy is to
amputate his leg. How will he be compensated under the Coid Act,
would he have been treated any different under a Employers
Liability Policy? What would the Coid Act Commissioner say about
the lack of Safety belt?
Slide 60
PROFESSIONAL INDEMNITY INSURANCE 1 THIS IS A CLASS OF LIABILITY
INSURANCE; THE LAW RELATING TO DEFECTS IN BUILDINGS AND STRUCTURES
AS WELL AS THAT RELATING TO ECONOMIC LOSS HAS BECOME ONEROUS TO
CONTRACTORS, ENGINEERS, ARCHITECHTS, SURVEYORS AND OTHER
PROFESSIONALS; AS A CONSEQUENCE PROFESSIONAL INDEMNITY INSURANCE
HAS BECOME OF GREAT SIGNIFICANCE TO PROFESSIONAL BODIES; THE COVER
IS ON A CLAIMS MADE BASIS IN OTHER WORDS IF A CLAIM IS FIRST MADE
AGAINST AN INSURED SOME TIME AFTER THE OCCURRENCE OF THE EVENT THAT
GAVE RISE TO THE CLAIM, THEN THE INSURER WHO IS CURRENTLY ON RISK
SHALL BECOME LIABLE TO INDEMNIFY THE INSURED FOR THE CLAIM
Slide 61
PROFESSIONAL INDEMNITY INSURANCE 2 THE PRIMARY FUNCTION OF THE
POLICY IS TO PROVIDE FOR FINANCIAL OR ECONOMIC LOSS IN OTHER WORDS
LOSSES NOT ACCOMPANIED BY PHYSICAL DAMAGE OR BODILY INJURY; IT IS
IMPORTANT TO FULLY DESCRIBE ALL THE ACTIVITIES OF THE INSURED IN
THE RECITAL CLAUSE AS THE INDEMNITY APPLIES TO THE STATED BUSINESS
AND NO OTHER FOR EXAMPLE DESIGN AND CONSTRUCT CONTRACTORS,
ARCHITECHTS, DESIGN ENGINEERS ETC.; IT IS A LEGAL LIABILITY POLICY,
THUS THE INSURERS OBLIGATION TO INDEMNIFY ONLY BECOMES PAYABLE ONCE
THE INSURED HAS BEEN FOUND TO BE LEGALLY LIABLE; PROFESSIONAL
INDEMNITY IS NOT A CONTRACT BASED ON MORAL OR COMMERCIAL
CONSIDERATIONS
Slide 62
PROFESSIONAL INDEMNITY INSURANCE 3 COVER IS BASED ON BREACH OF
PROFESSIONAL DUTY; THE CLAIM HAS TO BE MADE (AS PREVIOUSLY
DISCUSSED) DURING THE PERIOD OF INSURANCE; COVER ENVISAGES CLAIMS
ARISING OUT OF NEGLIGENT ACTS, ERRORS OR OMISSIONS THESE WORDS HAVE
NEVER BEEN DEFINED, SOME LEGAL CASES TAKE THE VIEW THAT THEY REFER
TO NEGLIGENCE ONLY, THERE ARE, OF COURSE, OTHER INTERPRETATIONS; IN
THE CASE WIMPY CONSTRUCTION UK LTD. VS POOLE(1984) IT WAS HELD THAT
THE TERM OMISSION ERROR OR NEGLIGENT ACT COVERED AN OMISSION OR
ERROR WITHOUT NEGLIGENCE, EVEN THOUGH AN ANCILLARY CLAUSE IN THE
POLICY REFERRED TO NEGLIGENT ACT, ERROR OR OMISSION
Slide 63
PROFESSIONAL INDEMNITY INSURANCE 4 THE DESIGN AND CONSTRUCT
POLICY WORDING EXCLUDES ANY LIABILITY ARISING DUE TO THE INSURED
(CONTRACTOR) HAVING GIVEN AN EXPRESS WARRANTY OR GUARANTEE THAT
INCREASES THE INSUREDS LIABILITY. THIS EXCLUSION DOES NOT APPLY TO
LIABILITY WHICH WOULD HAVE ATTACHED IN THE ABSENCE OF SUCH EXPRESS
WARRANTY OR GUARANTEE; THE P.I. POLICY REFERS NOT ONLY TO THE
INSURED NAMED IN THE SCHEDULE, BUT ALSO TO PREDECESSORS IN BUSINESS
OR ANY EMPLOYEE OF THE INSURED; WHEN BUSINESSES AMALGAMATE OR SPLIT
UP, THE APPLICATION OF THE PREDECESSORS TO BUSINESS CLAUSE CAN GIVE
RISE TO DIFFICULTIES; WHERE THERE HAS BEEN A RECENT AMALGAMATION OR
SPLIT IT IS IMPORTANT TO ASCERTAIN EXACTLY WHAT THE LIABILITIES OF
THE NEW AND OLD BUSINESSES ARE.
Slide 64
PROFESSIONAL INDEMNITY INSURANCE 5 NEGLIGENCE BY EMPLOYEES OF
THE INSURED OR EMPLOYEES OF PREDECESSORS IN BUSINESS IS ALSO
COVERED. MISTAKES BY EMPLOYEES ARE THE MOST FREQUENT CAUSE OF
CLAIMS UNDER A P.I. POLICY; THE P.I. POLICY ALSO PROTECTS THE
INSURED AGAINST ANY LIABILITY HE MAY INCUR ARISING OUT OF THE USE
OR EMPLOYMENT OF AGENTS; THIS SUBJECT IS MAINLY A PUBLIC LIABILITY
COVER AND WILL BE COVERED MORE EXTENSIVELY BY THE PUBLIC LIABILITY
COURSE, WE THEREFORE, DO NOT INTEND TO GO FURTHER INTO THIS
SUBJECT.
Slide 65
BUILDING DEFECTS INSURANCE 1 OTHERWISE KNOWN OVERSEAS AS
DECENNIAL LIABILITY; IT HAS ITS ORIGINS IN NAPOLEONIC LAW; IT ONCE
AGAIN GAINED POPULARITY AFTER THE FIRST WORLD WAR WHEN CONSIDERABLE
CONSTRUCTION WAS TAKING PLACE IN EUROPE; THE POLICY COVERS INHERENT
DEFECTS IN BUILDING STRUCTURES WHICH ONLY BECOME MANIFEST AFTER THE
COMPLETION OF CONSTRUCTION, WHERE THIS THREATENS THE STABILITY OF
THE STRUCTURE DUE TO DESIGN PLAN SPECIFICATION MATERIALS OR
WORKMANSHIP LANDSLIP SUBSIDENCE OR HEAVE IS ALSO COVERED; THE COVER
IS BASED ON THE DESIGN PLAN AND SPECIFICATION BEING FULLY DIVULGED
TO INSURERS FOR APPROVAL BY THEIR CONSULTANTS AND THAT GEOTECHNIC
AND HYDROLOGY TESTS ARE CARRIED OUT ON THE SITE AND THE RESULTS ARE
GIVEN TO INSURERS FOR APPROVAL COVER MUST BE APPLIED FOR BEFORE
COMMENCEMENT
Slide 66
BUILDING DEFECTS INSURANCE 2 THE PRIMARY COVER EXCLUDES
WATERPROOFING OF THE BUILDING ENVELOPE, HOWEVER, THIS DOES NOT
EXCLUDE DAMAGE TO THE STRUCTURE AS A CONSEQUENCE OF FAULTY WEATHER
PROOFING; INSURERS CONSULTANTS MUST BE GIVEN ACCESS TO SITE
THROUGHOUT THE CONSTRUCTION PERIOD; AFTER PRACTICAL COMPLETION A
FURTHER INSPECTION OF THE ASPECTS THAT REQUIRED RECTIFICATION OR
ATTENTION, ONCE SATISFACTORY COMPLETION HAS OCCURRED, BUILDING
DEFECTS COVER CAN BE CONFIRMED; COVER GENERALLY EXCLUDES FIRE AND
ALLIED PERILS, DAMAGE DUE TO ALTERATIONS, MODIFICATIONS OR
EXTENSIONS INADEQUATE MAINTENANCE OR WHERE THE DESIGN LOAD HAS BEEN
EXCEEDED; THIS COVER DOES NOT TAKE PRECEDENCE TO THE MAINTENANCE
COVER AFFORDED BY THE CONSTRUCTION POLICY.
Slide 67
CONSEQUENTIAL LOSS DUE TO CONSTRUCTION ACCIDENTS THERE ARE A
VARIETY OF CONSEQUENTIAL LOSS COVERS THAT MAY BE TRIGGERED BY
CONSTRUCTION RISKS, BOTH THE EMPLOYER AND THE CONTRACTOR CAN BE
EXPOSED TO LOSSES AS A RESULT OF CONSTRUCTION ACCIDENTS; THE COVERS
ENVISAGED ARE: INCREASED COST OF WORKING CONTRACTORS, ADVANCE LOSS
OF RENT EMPLOYERS AND DEVELOPERS, ADVANCE LOSS OF INTEREST
EMPLOYERS AND DEVELOPERS, ADVANCE PROFITS/DELAYED START UP.-
EMPLOYERS WE WILL EXAMINE EACH OF THESE INDIVIDUALLY
Slide 68
INCREASED COST OF WORKING ACCIDENTS ON SITE CAN CAUSE DELAYS IN
COMPLETION OR EVEN IN A WORST CASE SCENARIO THE TOTAL LOSS OF
CONSTRUCTED WORKS, SAY BY FIRE OR FLOOD ETC. ACCORDINGLY THE
CONTRACTOR MAY BE AT A LOSS DUE TO HAVING TO CONTINUE TO REMUNERATE
WORKERS AND PAY CONTINUING HIRE CHARGES FOR PLANT AND MACHINERY
DAMAGED IN THE EVENT. THE CONTRACTOR WILL AS A RESULT BE OUT OF
POCKET AS HE WILL NOT BE ABLE TO RECOUP THE INCREASED COSTS. COVER
FOR SUCH LOSSES IS AVAILABLE IN THE MARKET BUT SUBJECT TO A TIME
EXCLUSION AND INDEMNITY PERIOD, THE PREMIUM CHARGE IS NOT
CHEAP.
Slide 69
ADVANCE LOSS OF RENT OR INTEREST THIS COVER IS MAINLY DIRECTED
AT EMPLOYERS, BEING PROPERTY OWNERS OR DEVELOPERS, WHO MAY SUFFER
RENT LOSSES DUE TO DELAYED OR NON COMPLETION OF THE WORKS. PART OF
THE FEASABILITY STUDY BEFORE ENTERING INTO ANY CONTRACT FOR
CONSTRUCTION, OR EVEN PURCHASING THE LAND, THE EMPLOYER EVALUATES
THE OVERALL COST TO HIM AND AT WHAT POINT HE WILL START TO RECEIVE
EARNINGS FROM HIS INVESTMENT. IT MUST BE REMEMBERED THAT HE IS
EITHER USING HIS OWNN FINANCE OR HE IS TAKING OUT LOANS TO COVER
THE COST OF DEVELOPMENT IN EITHER CASE HE IS EITHER LOSING INTEREST
ON VESTED CAPITAL OR HE IS PAYING INTEREST ON THE LOAN. THE
CONSTRUCTION PERIOD IS THUS VITAL TO HIS POTENTIAL COST
Slide 70
ADVANCE PROFITS OR DELAYED START-UP - 1 THIS COVER IS ALLIGNED
MAINLY TO PRODUCTION PROCESSES. INVESTORS WHO PUT MONEY INTO A
VENTURE DO SO FOR THE PURPOSE OF INCREASING THEIR WEALTH THROUGH
SUCH INVESTMENT, ACCORDINGLY, THEY EXPECT THE EARNINGS OF THE
VENTURE TO COMMENCE ON SCHEDULE; THE VENTURE MAY BE AN INDUSTRIAL
MANUFACTURING PROCESS, MINING OR A CHEMICAL OR PETRO-CHENICAL
FACILITY; IRRESPECTIVE OF THE NATURE OF THE VENTURE, WHEN THE
OPERATIONS RUN LATE, THIS BRINGS ABOUT AN UNEXPECTED LOSS TO THE
INVESTOR. HAPPILY, HE CAN INSURE AGAINST THIS EVENTUALITY UNDER AN
ADVANCE PROFITS POLICY; THE ADVANCE PROFITS POLICY IS ONLY
TRIGGERED BY AN INDEMNIFIABLE EVENT UNDER THE CONSTRUCTION
POLICY.
Slide 71
ADVANCE PROFITS OR DELAYED START-UP - 2 THE SUM INSURED UNDER
THIS POLICY IS A FIXED AMOUNT BASED ON THE EXPECTED EARNINGS OF THE
BUSINESS DURING THE PERIOD OF INDEMNITY SAY 12 MONTHS, THE COVER IS
SUBJECT TO AVERAGE. THERE IS, HOWEVER, A DEDUCTIBLE APPLICABLE TO
THE INDEMNITY, THIS IS A TIME EXCLUSION WHICH IS USUALLY QUITE
LENGTHY FOR COMPLEX PRODUCTION PROCESSES AND MINING, THIS COULD
EXTEND TO THREE MONTHS, MOST STANDARD TRIED AND TESTED PROCESSES
WOULD HAVE A 1 TO 3 WEEK EXCLUSION PERIOD, BUT NEVER LESS THAN 3
DAYS. SOME PROCESSES SUCH AS PETRO-CHEMICAL RISKS HAVE AN EXCLUSION
OF COVER DURING THE FIRST 7 DAYS OF TESTING, IN OTHER WORDS ANY
ACCIDENT OR FAILURE DURING THE FIRST 7 OPERATING DAYS, WHILE
COVERED UNDER THE WORKS POLICY WOULD NOT QUALIFY FOR INDEMNITY
UNDER THE ADVANCE PROFITS POLICY.
Slide 72
ADVANCE PROFITS OR DELAYED START-UP - 3 CLEARLY, THE COVER MUST
BE BASED ON A REALISTIC COMPLETION DATE (DATE ON WHICH COMMERCIAL
PRODUCTION IS EXPECTED TO COMMENCE). THE CLIENT HAS AN OBLIGATION
TO KEEP THE INSURER INFORMED ON OCCURRENCES AND EVENTS THAT MAY
HAPPEN OR OCCUR THAT WOULD DELAY OR RETRACT THE COMPLETION DATE,
THUS AFFECTING THE COVER UNDER THE POLICY. THE INSURER IS GIVEN
ACCESS TO THE CONSTRUCTION SITE AT ANY REASONABLE TIME TO ENSURE
THE WORK IS BEING UNDERTAKEN UNDER GOOD ENGINEERING PRACTICES AND
TO QUANTIFY THE COMPLETION DATES OF INDIVIDUAL COMPONENTS AND THE
INTEGRITY OF THE PROJECT AS A WHOLE. THE INSURER ALSO HAS THE RIGHT
TO TAKE OVER AND CONTROL ANY REPAIR OR REPLACEMENT PROCEDURE TO
ENSURE THAT THE WORK IS UNDERTAKEN EXPEDITIOUSLY AND TO PROPER
STANDARDS OF ENGINEERING EXCELLENCE.
Slide 73
BONDS - 1 CONTRACTORS ARE INVARIABLY REQUIRED TO PROVIDE
CERTAIN TYPES OF BOND OR GUARANTEE. THE PROVIDERS OF THESE BONDS OR
GUARANTEES ARE EITHER A BANK OR INSURANCE COMPANY. THE MOST USUAL
BONDS ARE: PERFORMANCE BONDS: THIS IS ONE OF THE MOST IMPORTANT
BONDS GIVEN BY A CONTRACTOR, IT IS FURNISHED BY THE CONTRACTOR
BEFORE THE START OF THE CONTRACT. ITS SOLE PURPOSE IS TO PROTECT
THE EMPLOYER AGAINST BREECH OF CONTRACT BY THE CONTRACTOR; BID OR
TENDER BOND: THIS BOND IS SUBMITTED BY THE CONTRACTOR WITH HIS BID
OR TENDER, THUS SHOWING THE EMPLOYER THAT HIS BID IS REASONABLE AND
IF ACCEPTED THE CONTRACTOR WILL SIGN A CONTRACT TO PERFORM THE WORK
INCLUDING ANY BOND REQUIREMENTS. THE BOND IS FORFEITED IN FAVOUR OF
THE EMPLOYER IF THE CONTRACTOR FAILS TO PERFORM THE WORKS SPECIFIED
IN THE TENDER
Slide 74
POINTS TO BE AWARE OF 1 SITE PREPARATION AND CLEARANCE SOUNDS
QUITE INNOCUOUS DOESNT IT??? NOT TOO SERIOUS IF IT INVOLVES REMOVAL
OF UNDERGROWTH AND THE LIKE FOR THE MAKING OF A ROAD; WHAT IF THE
SITE CLEARANCE EMBRACES BUILDING DEMOLISHMENT OR MACHINERY
DISMANTLING OR REMOVAL?? SAY FOR EXAMPLE THE BUILDINGS WERE
PREVIOUSLY USED FOR THE MANUFACTURE OF CHEMICALS OR THE MACHINERY
WAS THAT OF A PETRO-CHEMICAL WORKS, HOW ABOUT A TANK FULL OF
INFLAMABLE MATERIALS, NOW THE POSSIBILITY OF LOSS OR DAMAGE OR
LIABILITY BECOMES QUITE SERIOUS HOW ABOUT THE CONTRACTORS WORKERS
THEY TOO ARE AT RISK; SHOULD A REQUEST FOR SITE PREPARATION AND
CLEARANCE COVER BE RECEIVED, INVESTIGATE FULLY THE EXTENT THEREOF
AND UNDERSTAND THE RISKS INVOLVED.
Slide 75
POINTS TO BE AWARE OF 3 HIGH RISE BUILDINGS THE NUMBER OF
BASEMENTS REMEMBER THE DEEPER THE EXCAVATION THE GREATER THE RISK
OF COLLAPSE AND REMOVAL OF SUPPORT TO ADJACENT PROPERTY; WHAT
SUPPORT WILL BE INSTALLED TO PREVENT COLLAPSE ASK FOR DETAILS OF
THE NATURE OF TEMPORARY AND PERMANENT SUPPORT, HAVE BOREHOLES BEEN
SUNK TO ESTABLISH THE LEVEL OF THE WATERTABLE AND SITE GEOLOGY ASK
FOR COPIES OF REPORTS WHAT IS THE ANTICIPATED VOLUME OF WATER
INFLOW? INVESTIGATE THE PUMPING ARRANGEMENTS TO HANDLE THE NORMAL
INGRESS OF WATER AND STANDBY PUMPING ARRANGEM, ENQUIRE ABOUT
PUMPING ARRANGEMENTS TO HANDLE INCREASED FLOW OF WATER FOLLOWING
STORM OR DUE TO INCREASED FLOW OF UNDERGROUND WATER; ENQUIRE ABOUT
THE SUPERSTRUCTURE WILL THIS BE STEEL FRAMED OR REINFORCED CONCRETE
OR A COMBINATION OF BOTH; REMEMBER, THE GREATER THE NUMBER OF
FLOORS THE GREATER THE RISKS, ESPECIALLY THIRD PARTY LIABILIT
Slide 76
POINTS TO BE AWARE OF 2 ROAD CONSTRUCTION WHAT IS THE LENGTH OF
THE ROAD WILL THE ROAD BE SINGLE OR DOUBLE CARRIAGEWAY OBTAIN
DETAILS OF THE LAYERWORKS BASE COURSE PLUS ?? LAYERS AT WHAT
INTERVALS WILL THE LAYERWORKS BE SEALED (REMEMBERING ONE BITUMEN
TANKER CAN SEAL 1KM OF DOUBLE LANE ROAD) WHAT IS THE NATURE OF THE
TERRAIN IT WILL BE CROSSING IS IT GENTLY UNDULATING OR IS THE
TERRAIN HILLY WILL THERE BE LARGE CUT AND FILL OPERATIONS WILL THE
ROAD CROSS ANY FLOOD PLAINS WHAT STRUCTURES WILL BE CONSTRUCTED IF
INVOLVING CULVERTS THE NUMBER NATURE AND SIZE IF BRIDGES ARE TO BE
CONSTRUCTED WILL THESE BE CONSTRUCTED BY CONVENTIONAL METHODS OR
WILL THEY BE INCREMENTALLY LAUNCHED WILL THE BRIDGES INVOLVE
INSTALLATION OF PILES WILL THERE BE ANY RIVER OR OTHER WET
CROSSINGS WHAT UNUSUAL HAZARDS MAY BE EXPECTED OR UNUSUAL
OPERATIONS
Slide 77
POINTS TO BE AWARE OF 4 SHAFT SINKING IS THE SHAFT TO BE
VERTICAL OR INCLINE; OBTAIN DETAILS OF THE PRE SINKING EXPLORATORY
WORK AND NATURE OF THE SHAFT COLLAR; REVIEW THE GEOTECHNIC REPORT;
IDENTIFY ANY AREAS OF POOR ROCK CONDITIONS; REVIEW THE HYDROLOGY
REPORT; ASK FOR DETAILS OF THE EXPECTED INGRESS OF WATER; ASK FOR
PARTICULARS OF PUMPING ARRANGEMENTS AND DETAILS OF ADDITIONAL PUMPS
TO HANDLE AN INCREASED FLOW; ENQUIRE AS TO THE DIAMETER OF THE
SHAFT; WILL THE SINKING PROCESS BE BY CONVENTIONAL DRILLING,
BLASTING AND GRUBBING? WILL THE SHAFT BE LINED AND AT WHAT POINT
WILL THIS OCCUR? IF THERE ARE QUESTIONABLE GEOTECHNIC CONDITIONS
ARE THERE ANY PROCEDURES TO PREVENT COLLAPSE?
Slide 78
RISK ASSESSMENT SOME CAUSES OF LOSS OR DAMAGE FIRE LIGHTNING
EXPLOSION SUBSIDENCE LANDSLIDE COLLAPSE HEAVE EARTHQUAKE WATER
DAMAGE WIND FROST AND SNOW FALLING IMPACT OVERTURNING ELECTRICAL OR
MECHANICAL BREAKDOWN SEASONAL CHANGE RIOT CIVIL COMMOTION MALICIOUS
DAMAGE THEFT OR ANY ATTEMPT THEREAT DEFECTIVE DESIGN PLAN
SPECIFICATION OR SUPERVISION
Slide 79
RISK ASSESSMENT SOME CAUSES OF LOSS OR DAMAGE SITE HUTS AND
STORAGE AREAS These are areas where a variety of claims can arise,
such as: Water Damage Fire Theft How and why do these areas promote
claims? Storage conditions may not be ideal for water sensitive
products such as refractory bricks It is not unusual for site huts
to be erected in close proximity to one another thus the spread of
fire from one hut to another etc. Small components and Electrical
cable are a target for thieves, especially those items that can be
sold easily. Even though there is a competent Storeman goods still
find their way out of the back door.
Slide 80
RISK ASSESSMENT SOME CAUSES OF LOSS OR DAMAGE Fire break Main
storage area for small & sensitive items cable drums Steel
Engineers Office Storemans office Drawing office
Slide 81
RISK ASSESSMENT SOME CAUSES OF LOSS OR DAMAGE no firebreak
grass growing up to site huts Site huts in close proximity
Slide 82
RISK ASSESSMENT PHYSICAL HAZARDS OF CONSTRUCTION UNDER THIS
HEADING WE ARE CONSIDERING THE HAZARDS ASSOCIATED WITH THE
CONSTRUCTION OF THE WORKS; CONSTRUCTION INSURANCE EMBRACES A VAST
VARIETY OF CONSTRUCTION PROJECTS. THESE INCLUDE: BUILDINGS, WATER
TOWERS, CHIMNEY STACKS, COOLING TOWERS, BRIDGES AND THE LIKE; SHAFT
SINKING AND EQUIPPING, UNDERGROUND DEVELOPMENT ROADS, TUNNELS,
AIRPORT RUNWAYS, RAILWAY LINES ETC.; CROSS COUNTRY AND UNDER SEA
PIPELINES, DAMS, HARBOUR WORKS, RESERVOIRS, HYDRO POWER TUNNELS AND
VENTS; MAJOR AND MINOR ELECTRICAL AND MECHANICAL WORKS COMPRISING:
PETROCHEMICAL WORKS, POWER STATIONS, ENGINEERING MACHINE SHOPS,
STEEL SMELTERS AND MILLS, ALUMINIUM SMELTERS ETC SUGAR MILLS, FLOUR
MILLING, FROZEN FOODS & OTHER FOOD INDUSTRY RADIO &
TELEVISION STATIONS, AIRPORT FLIGHT CONTROL SYSTEMS
Slide 83
RISK ASSESSMENT PHYSICAL HAZARDS OF CONSTRUCTION METHODS SOME
OF THE MAIN FACTORS AFFECTING RISK, PRIMARILY IN CIVIL AND
STRUCTURAL CONSTRUCTION, REVOLVE AROUND SOIL CONDITIONS, HYDROLOGY,
ELEMENTAL PERILS AND, OF COURSE, THE QUALITY AND EXPERTISE OF
AVAILABLE LABOUR; TURNING NOW TO ELECTRICAL AND MECHANICAL WORKS,
PROBABLY THE GREATEST RISKS OCCUR IN HANDLING, ASSEMBLY, INCORRECT
ELECTRICAL CONNECTIONS, FAULTY MATERIALS, FAULTY WORKMANSHIP OR DUE
TO STORM (WIND); FIRE, LIGHTNING, CARELESSNESS, NEGLIGENCE AND LACK
OF SKILL AFFECT ALL MANNER OF CONTRACT WORKS. MANY OF THE RISKS ARE
NOT CONFINED TO DAMAGE TO THE CONTRACT WORKS BUT CAN ALSO HAVE
THIRD PARTY CONNOTATIONS.
Slide 84
RISK ASSESSMENT SOME HAZARDOUS OPERATIONS EXCAVATION AND/OR
DE-WATERING COLLAPSE OF SIDES, AFFECTING THE SITE AND POSSIBLY
REMOVING SUPPORT TO ADJACENT PROPERTY DAMAGE TO WORKS &
LIABILITY WELDING - INAPPROPRIATELY CODED WELDER EXPLOSION AND/OR
FIRE DAMAGE TO WORKS & POSSIBLY INJURY OR DEATH TO MEMBERS OF
THE LABOUR FORCE INAPPROPRIATE DESIGN OF TEMPORARY AND PERMANENT
SUPPORT AFFECTING WORKS AND POSSIBLY ADJACENT PROPERTY POURING
CONCRETE AT INAPPROPRIATE TIMES CONCRETE BEING AFFECTED BY FROST OR
HIGH TEMPERATURE CRANES NOT BEING SITED ON FIRM GROUND CRANE &
WORKS LACK OF CONTROL WHEN HOISTING PROPERTY BY CRANE LIABILITY AND
WORKS
Slide 85
RISK ASSESSMENT SOME HAZARDOUS OPERATIONS PACKING MATERIALS NOT
REMOVED FROM THE STRUCTURE SPONTANEOUS COMBUSTION OR A CARELESSLY
DISCARDED CIGARETTE CAN START A FIRE; REMEMBER THAT STAIRWELLS AND
LIFT SHAFTS CAN CREATE A CHIMNEY EFFECT THUS SPREADING FIRE; IF PVC
CLAD ELECTRICAL CABLES HAVE BEEN INSTALLED, THE WATER FROM THE
FIREFIGHTING CAN CARRY THE ACID FROM THE BURNING CABLES INTO THE
CONCRETE AND SO RENDERING THE CONCRETE POROUS AND INEFFECTIVE AS
THE CEMENT HAS BEEN DISSOLVED; CONSTRUCTION NEAR TO WATERWAYS CAN
RESULT IN FLOOD OR SUBSIDENCE OR CLAY CONDITIONS SO REDUCING THE
SUPPORTIVE CAPACITY OF THE GROUND
Slide 86
RISK ASSESSMENT THE CONSTRUCTION PROCESS INSECURE FOUNDATIONS,
IF THE FOUNDATIONS START SUBSIDING THE SUPPORT OF THE BUILDING
BECOMES COMPROMISED AND OVER A PERIOD OF TIME THE BUILDING WILL
SHOW CRACKS AND IF NOT ATTENDED TO, COLLAPSE CAN OCCUR STELLENBOSCH
BUSINESS SCHOOL; WORK IN HAZARDOUS AREAS SUCH AS CHEMICAL PLANTS
CAN RESULT IN FIRE EXPLOSION OR VAPOUR CLOUD IF WORK IS NOT CARRIED
OUT IN A MANNER TO AVOID THIS TYPE OF LOSS. (THE FLIXBOROUGH, UK
DISASTER); FROM THE FOREGOING IT WILL BE APPRECIATED THAT THE
HAZARDS ARE NUMEROUS AND CAN OCCUR AT ANY TIME.
Slide 87
CAUSES OF LOSS OR DAMAGE FIRE GENERALLY DUE TO ACTS OF MAN,
SMOKING, WELDING, INFLAMABLE MATERIALS, LACK OF FIREFIGHTING
EQUIPMENT LEFT ENERGISED WHEN UNATTENDED - HEATERS; EXPLOSION
BLASTING, TESTING OF MACHINERY, ROGUE PIPES OR TUBES; SUBSIDENCE,
HEAVE, LANDSLIP, COLLAPSE, VIBRATION OR UNDERMINING GENERALLY
RELATED TO GEOLOGICAL OR SOIL CONDITIONS, USUALLY FOLLOWING
EXCAVATIONS; EARTHQUAKE THERE ARE MANY KNOWN EARTHQUAKE AREAS
AROUND THE WORLD, BUT THE IMPORTANT AREA IN SOUTH AFRICA IS THAT OF
THE WESTERN CAPE; WATER DAMAGE FLOOD, STORM, WATER COURSES,
UNDERGROUND WATER, ROADS AND PIPE/CABLE TRENCHES BECOME
WATERCOURSES
Slide 88
CAUSES OF LOSS OR DAMAGE WIND THE POTENTIAL FOR WIND DAMAGE IN
SOUTH AFRICA CAN BE MANAGED, UNLIKE USA, CHINA, AND MANY OTHER
AREAS THROUGHOUT THE WORLD, OUR MOST HAZARDOUS AREAS ARE ADJACENT
TO THE COAST; FROST AND SNOW FROST IS PARTICULARLY DANGEROUS TO
FRESHLY LAID CONCRETE, IF PROPER PRECAUTIONS ARE TAKE THE RISKS ARE
MINIMISED, FROST AND SNOW ARE PARTICULARLY HAZARDOUS TO MACADEMISED
ROAD WORKS ESPECIALLY THE SEALING LAYER IF SNOW OR FROST OCCURS
SOON AFTER THE TAR SEALANT HAS BEEN APPLIED CRUMBLING OF THE TAR
WOULD IN ALL PROBABILITY BE THE RESULT; (OR TAMBO 2 ND RUNWAY)
BREAKDOWN DURING TESTING USUALLY DUE TO INHERENT DEFECT, FAULTY
ERECTION OR INCORRECT WIRING;
Slide 89
CAUSES OF LOSS OR DAMAGE FALLING IMPACT OVERTURNING OR
OVERBALANCING THESE PERILS ARE PARTICULARLY HAZARDOUS IN THE
HANDLING OF MACHINERY AND COMPONENTS THEREOF OR STRUCTURAL
STEELWORK. MOST DAMAGE OCCURS WHEN USING CRANE PLANT; (PIPES BEING
HOISTED AT JHB SUN & TOWERS) CRIME RISKS THEFT AND ATTEMPTED
THEFT CAN AND DO OCCUR ON CONTRACT SITES AS FOR ANY OTHER LOCATION,
SITE SECURITY NEEDS TO BE OF THE HIGHEST INTEGRITY COLLUSION
BETWEEN SITE SUB-CONTRACTORS EMPLOYEES IF NOT CONTROLLED CAN LEAD
TO LOSSES ANOTHER PROBLEM IS THAT OF LOCAL CIVICS, ESPECIALLY WHEN
THE CONTRACT WORKS SPREADS OVER A LARGE AREA, SAY A ROAD OR RDP
HOUSING AND OTHER FACILITIES;((WHEELBARROWS BRASS FITTINGS(SUGAR
MILL) CIVICS)) DESIGN PLAN AND SPECIFICATION DESIGN SPECIFICATION
REQUIRING PARTICULAR CONSTRUCTION TECHNIQUES WHERE THE CONSTRUCTION
METHODOLOGY MAY BE UNKNOWN TO THE CONTRACTOR THUS REULTING IN
DAMAGE, SIMILAR CONSIDERATIONS APPLY TO PROTOTYPES EXAMPLE
SIGNALLING CABLE SISHEN SALDAHNA RAIL LINE
Slide 90
CAUSES OF LOSS OR DAMAGE It can take months from the date of
acquiring a green fields site until construction work commences. In
many cases, existing buildings on the site have to be demolished
before construction work can begin. The construction period for
major civil engineering projects, such as freeways and dams, is
often between three and five years, whereas the construction and
commissioning of a power station can take up to 8/10 years. The
following paragraphs outline briefly the nature of each process,
each of which has its own potential hazards
Slide 91
CAUSES OF LOSS OR DAMAGE DEMOLITION This can take many forms,
depending on the nature of the building, its location, and
proximity to busy thoroughfares. In some cases, some part of the
structure may be left standing, to be incorporated into the new
works. This may need special consideration by the contract works
underwriter, in view of the usual exclusion of existing structures.
Surrey House, M & F Centre Facades (National Monuments) If the
location is remote, the job may be done quickly by the use of
explosives. The operatives must be experienced in the use of
explosives, and all safety regulations must be complied with. In
most cases, the use of explosives, or even mechanical means, is not
practical or safe because of the presence of the general public. If
the site is in a derelict area, a crane jib and ball can be used to
pull down walls, or an earth moving machine with hawser attached
can be employed.
Slide 92
CAUSES OF LOSS OR DAMAGE DEMOLITION CONTINUED In recent years,
it has become fairly common practice to demolish high rise
buildings using the implosion method. Highly specialised skills are
required, and underwriters will tend to focus on the track record
of the demolition contractors, and any deviation from the
techniques successfully used by them in the past. As this type of
operation normally takes place in heavily built-up areas, the
contractor needs to obtain the full co- operation of the
authorities and traffic police to warn and safeguard the occupants
of surrounding buildings and the general public. In addition, steps
are generally necessary to provide physical protections for the
buildings closest to the contract site. (Matla Chimney Stack)
Slide 93
CAUSES OF LOSS OR DAMAGE DEMOLITION CONTINUED Underwriters need
to protect their interests by employing a suitably qualified
structural engineer to evaluate the methods and techniques to be
used by the demolition contractor. Such engineers, in conjunction
with the demolition contractors engineer, should undertake a survey
of buildings in the explosion zone of the demolition to establish
existing cracks and other defects, photographs should be taken as
evidence. Protective covers should be placed over air conditioning
intakes of adjacent buildings (within the dust zone). (Customs
House, Johannesburg)
Slide 94
CAUSES OF LOSS OR DAMAGE GROUND WORKS Ground work differs from
all other construction work in that very little is constructed. The
insurer must remember that the prime purpose of the work is the
excavation of material to form spaces and, if they are refilled by
accident, considerable expenditure may be necessary to re-excavate
the space. The work involved may be sub-divided into: earth moving
such as cut and fill operations or fill only operations; mass
excavation can form part of a construction contract, or be let as a
separate contract, or as a main sub-contract where the
sub-contractor may or may not be required to arrange his own
insurance. trenching or water diversionary works including
canalising of waterways; tunnelling and shaft sinking which may
embrace underground development works); piling. Let us look at each
process separately.
Slide 95
CAUSES OF LOSS OR DAMAGE EARTHMOVING Earth moving normally
forms part of a major project such as road building or may be the
preliminary to the construction of a large industrial complex or
power plant. Earth moving will also form a large part of the work
involved in the construction of an earth embankment dam. In most
African countries, the major risk in this type of work is the
removal of construction material by heavy rainfall or flooding,
particularly in the case of large road projects, where the
logistics and cost of replacing the material can be time consuming
and costly and involve considerable labour and plant usage. NATAL
NORTH COAST HOUSING TERRACES WASHED AWAY The cost of salvaging and
repairing large and expensive items of plant that have been flooded
can also result in substantial claims, usually under a plant
insurance policy. Koeberg scrapers
Slide 96
CAUSES OF LOSS OR DAMAGE MASS EXCAVATION Mass excavation is
normally associated with foundation works or the construction of
basements utilising methods (including dewatering) already
described. In all cases, except shallow excavations where the soil
conditions allow the use of a reasonably unsupported batter
(slope), some support to the sides of the excavation will be
necessary. Concrete diaphragm wall constructions in a bentonite
slurry, or walls of close concrete piling constructed before
excavation begins should be self supporting. In the case of sheet
steel pile cofferdams, within which excavation is to take place,
there is always the risk of some instability. This may be caused by
not driving the piling to a sufficient depth so that the toe is
uncovered during excavation, by the flow of ground water scouring
beneath the toe, or by ground or ground water pressure where no
walling beams and cross strutting have been employed in a single
skin cofferdam.
Slide 97
REMOVAL OF SUPPORT IF LATERAL (SIDEWAYS) SUPPORT IS REMOVED,
THE BUILDING WILL SLIDE INTO EXCAVATION, HOWEVER, IF VERTICAL
SUPPORT IS REMOVED THEN THE BUILDING WILL COLLAPSE INTO THE
EXCAVATION. REMOVAL OF LATERAL SUPPORT GROUND AND BUILDING WILL
COLLAPSE OR SLIDE EXCAVATION REMOVAL OF VERTICAL SUPPORT GROUND
WILL COLLAPSE INTO EXCAVATION WITH BUILDING THUS WE SHOULD TALK
ABOUT REMOVAL OF SUPPORT AND NOT REMOVAL OF LATERAL SUPPORT
Slide 98
CAUSES OF LOSS OR DAMAGE MASS EXCAVATION Whatever the method of
supporting the sides of the excavation, however, there is always
the risk of inundation due to heavy rain or floodwater, or the
complete breakdown of the dewatering pumps. Deep excavations may
require complex internal strutting and other support work resulting
in a considerable restriction of the operational area. As a
consequence, there is a distinct possibility of damage to these
temporary works arising from the use of constructional plant or
during further excavation. Such damage could be costly to repair by
reason of additional expense in the avoidance of further damage in
the course of restoration or by the debris-removal operations being
extensive. A careful assessment should be made of the total value
of the constructional plant which may be in use within the
excavation at any one time. LUDERITZ HARBOUR WAVE SWELLS +5M
DESIGNED FOR SWELLS OF -3M SHEET PILES LOOSENED AND COLLAPSED
Slide 99
CAUSES OF LOSS OR DAMAGE TRENCHING As with mass excavation, the
main hazards with trenching are collapse of the sides or inundation
of the trench. Frequently, trench collapses are caused by the
complete absence of shoring and strutting to the trench sides
because of the firm cohesive nature of the soil in which the trench
is excavated. However, these soils are liable in abnormal weather
conditions to become unstable and collapse. Trenches may also
become filled with water, snow, sand, dust, mud and other detritus
requiring careful re-excavation or dewatering. In view of the
seriousness of the hazard in such work, the insurers may wish to
impose a warranty as to the maximum length of trench exposed at
anyone time. LAW REQUIRES TRENCH +1M TOBE BRACED
Slide 100
TRENCHES FOR PIPES OR CABLES When trenches are excavated during
or near to the Rainy season it is recommended that the trench sides
are shored up or supported to prevent collapse SHORING
Slide 101
SHAFT SINKING SHAFT COLLAR KIBBLE WINDER DOUBLE DRUM WINDER FOR
STAGE HEADGEAR SHEAVE WHEELS SHAFT SHAFT LINING MULTI DECK SINKING
STAGE KIBBLE FOR REMOVING WASTE ROCK GRAB FOR LOADING KIBBLE
Slide 102
CAUSES OF LOSS OR DAMAGE SHAFT SINKING Trial bore holes along
the route will only give a partial indication of the hazards to be
met. More accurate hydrology and geological information will be
gleaned by radial drilling (probing ahead of the working face),
thus identifying the exact nature of ground conditions and expected
water conditions before driving the next stage of the excavation.
Although there are always inherent risks in the use of explosives
and working below ground level, the results of any serious
difficulties are likely to be more expensive to the contractor in
terms of delay and remedial works than to the insurer in terms of a
claim. The insurer will, however, need to consider such delay if
his policy should contain a consequential loss section (advance
profits or delayed start-up) The presence of ground water or water
bearing strata may be dealt with either by the method of freezing
the surrounding areas using refrigeration pipes, or by curtain
grouting in advance of tunnelling operations Curtain grouting, if
effectively carried out, has the advantage of being a permanent
protection, whereas any breakdown in the refrigeration process
could result in the flooding of the tunnel. It is normal for the
tunnel lining to be constructed as the tunnelling proceeds and
there is always the possibility of damage to this lining if
inadvertently too large an explosive charge is used. DU TOITS KLOOF
TUNNEL MUD RUSH FREEZING MUD TO CONTINUE EXCAVATION NO CLAIM
PRINCIPALS COST
Slide 103
CAUSES OF LOSS OR DAMAGE SHAFT SINKING Shaft-sinking is
generally associated with mining operations, which, because of the
vast depths to which they now mine mainly gold (up to and in excess
of 3 kilometres, there are now plans to sink shafts to 4
kilometres) requiring highly specialised skills. The development of
a mine can include vertical and incline shafts as well as
horizontal and incline tunnels. These shafts are generally sunk
from the surface, however because of the great depths to which
mining operations are now carried out it is usually more advisable
to develop sub-vertical or sub-incline shafts at a point
considerably below ground level to minimise the drop from surface
to the shaft bottom, thus eliminating stretching the rope and
causing bounce.
Slide 104
CAUSES OF LOSS OR DAMAGE SHAFT SINKING Shafts are not only
excavated by drilling, blasting and grubbing but can also be
excavated by raise-boring, which also has its dangers. Experience
has shown that the most effective size of a raise-bore is 6 metres
(diameter) or less. This type of operation requires very specific
geologic investigation as well as hydrology identification as the
work will be undertaken in virgin ground with little or no
knowledge of the ground conditions.
Slide 105
CAUSES OF LOSS OR DAMAGE SHAFT SINKING CONTINUED There are
certain terms and exceptions usual to this type of risk due to the
nature of the unknowns of the geology and hydrology of the area.
For example, the Western area of Gauteng is mainly a dolomite area,
which acts as a sponge full of water due to all the voids, cracks
and fissures. It is quite amazing when boring in to this rock as to
the amount of water that can flow. Accordingly, the underwriter
must be aware of the risks to limit or exclude if he is to write
risks in this area. In a like manner there are many other areas in
South Africa that have peculiar rock strata that need to be
addressed, the risks become more extensive when underwriters expand
their horizons into Africa, where the geological and hydrology
conditions are unknown. SOUTH DEEP SHAFT FILLED TO ABOUT 250/300M
IN LESS THAN AN HOUR. GROUTING & FITTING AND REMOVING PLUG
Slide 106
CAUSES OF LOSS OR DAMAGE SHAFT SINKING CONTINUED The usual
conditions to be included in insurance policies covering shaft
sinking are: (a)a requirement for radial drilling (probing) ahead
of the working face; (b)excluding the pumping of water or damage
due to the quantity of water in-flow exceeding that which was
established during investigations by test-boring in the area of the
excavation; (c)the cost associated with fitting and removing a
concrete plug to stem the flow or ingress of water into the
excavation works; (South Deep Shaft) (d)to exclude the cost of
restoring the designed diameter (neat line) of the shaft due to
overbreak (a condition caused by excessive use of explosives or
inappropriate drilling of blast holes); (e)restoring collapse
exceeding 1 or more metres (at the discretion of the underwriter)
from the tangent of the neat lines of the excavation.
Slide 107
CAUSES OF LOSS OR DAMAGE SHAFT SINKING CONTINUED It is usual
during shaft sinking for unstable rock areas to be reinforced by
rock bolts or cable rock ties, sometimes steel mesh is fixed to the
bolts or ties, which is then gunited to establish a firm surface,
nevertheless, collapses still occur. The cost of reinstating the
collapsed material can be fairly expensive and underwriters may
wish to limit their financial exposure. Accordingly, it is not
unusual for an exclusion to be included in the policy limiting the
cost of reinstating the collapsed material to the amount of fill
required to reinstate the length of the rock bolt or rock tie.
Slide 108
CAUSES OF LOSS OR DAMAGE SHAFT SINKING CONTINUED Shaft sinking
is a highly specialised activity and the underwriter who thinks he
has the competency to know it all is fooling no one but himself. It
is imperative, if one wishes to participate in shaft sinking
Insurance, that the underwriter employs an experienced mining
consultant to evaluate geotechnical and hydrology investigation
reports and then the excavation programme and methodology of work
proposals. ORIGINAL POSITION OF SOUTH DEEP SHAFT COLLAPSE AND
RESITING
Slide 109
CAUSES OF LOSS OR DAMAGE SHAFT SINKING CONTINUED A tunneling
project basically involves the creation of a self-supporting or
artificially supported space or void within a section of a ground
mass, which prior to excavation was in a stabilised state of local
equilibrium. The stresses and pressures disturbed by the excavation
will be transferred to the tunnel surfaces. If these stresses or
pressures are not effectively relieved or checked, it is inevitable
that there will be problems for the contractor and consequently
losses for the insurer. Exposure to air, and possibly water, may
initiate chemical and other weathering processes not previously
present, which lining, grouting and other work must take into
account.
Slide 110
RISK ASSESSMENT SHAFT SINKING HAZARDS - 1 Although Shaft
Sinking has been practiced for more than 100 years, despite
considerable development of scientifically based methods of site
investigation and design, it remains substantially an art. The
success of any shaft sinking project will depend largely upon the
accuracy with which the site investigations can predict ground
conditions, the adequacy of the consulting engineer's planning and
design to meet the actual conditions, and the preparedness and
ability of the contractor to deal with the hazards
encountered.
Slide 111
RISK ASSESSMENT SHAFT SINKING HAZARDS - 2 The prediction of
ground conditions is based on careful geological mapping from the
surface, and subsurface exploration by boreholes and, in the case
of incline shafts by excavating adits at selected points along the
shaft route carried out during the planning of the project. Where
hazardous ground is predicted, it is now common practice for more
detailed exploration to be carried out during construction by
probing ahead of the tunnel face with long boreholes. The
geological features of the site are among the most important
factors in assessing the risk.
Slide 112
RISK ASSESSMENT SHAFT SINKING HAZARDS - 3 A shaft sinking
project basically involves the creation of a self-supporting or
artificially supported space or void within a section of a ground
mass, which prior to excavation was in a stabilised state of local
equilibrium. The stresses and pressures disturbed by the excavation
will be transferred to the shaft surfaces. If these stresses or
pressures are not effectively relieved or checked, it is inevitable
that there will be problems for the contractor and consequently
losses for the insurer. Exposure to air, and possibly water, may
initiate chemical and other weathering processes not previously
present, which lining, grouting and other work must take into
account. The permeability of the ground mass, the water table and
variations brought about by temporary surface conditions should be
investigated.
Slide 113
RISK ASSESSMENT SHAFT SINKING HAZARDS - 4 However, the
contractor can rarely be entirely confident as to the conditions
expected as local weathered zones, faults, fissures, dykes,
discontinuities, aquifers, voids, made up ground and even past mine
workings can seriously upset predictions and, with conditions very
different from those of the surrounding rock mass, present
unexpected hazards of inundations. Especially when compressed air
is used, the risks of fire and explosion can be very serious in all
shafts
Slide 114
RISK ASSESSMENT SHAFT SINKING HAZARDS - 5 The hazards to be
expected in shaft sinking are: rockfalls and rockbursts; collapse
of tunnel sides; inrush of water; inrush of soil or broken rock;
fire and explosion; heave or subsidence of ground surface. In shaft
sinking, falls are usually due to broken or crushed rock, often
associated with faults. In certain rocks containing expansive clay
minerals, enormous pressures, particularly at great depth, can be
expected on the shaft sides causing collapse. Below the water
table, heavy flows of water and loose materials are usually
associated with faulted or broken rock or with cavernous rock such
as limestone. Explosive gases are often found in coal-bearing
shales. Toxic gases can occur in volcanic rocks.
Slide 115
RISK ASSESSMENT SHAFT SINKING HAZARDS - 6 The difficulties of
dealing with flooding are greatly increased if the water is
encountered at the considerable depths to which many shafts are
sunk. Insurers must make appropriate enquiries about provisions for
pumping and grouting. The considerable vertical distances involved
in this type of shaft sinking can greatly increase the risk of
damage to constructional plant, as well as to the works. Any
equipment that may be accidentally dropped could easily sustain and
inflict considerable damage. Much heavy equipment is used in shaft
sinking, for example, the kibbles used for removing rock to the
surface may be carrying 15 tonnes or so. With some mines, once the
initial sink and shaft collar have been completed and the headgear
structure has been built, a sophisticated system for winding can be
installed and this usually incorporates many elaborate safety
precautions.
Slide 116
PILED FOUNDATIONS PILE CAP WEAK GROUND PILES CONCRETE OR STEEL
BEARING STRATUM
Slide 117
PILED FOUNDATIONS Where the maximum bearing strength of the
ground is less than the applied load, subsidence will occur. Some
means must therefore be adopted to increase the bearing capacity of
the ground and the normal method is to use bearing piles. Bearing
piles, as distinct from sheet piles, are nothing more than columns
under the ground reaching down to a firm stratum or if this is too
deep, relying for their support on the friction grip of the ground
(otherwise known as friction piles). The methods of piling and
types of bearing pile used are numerous, embracing a number of
proprietary systems. However, basically they may be divided into
two main types: Driven steel or concrete Bored - concrete
Slide 118
PILED FOUNDATIONS DRIVEN PILES Driven piles or displacement
piles as they are sometimes known, are defined as those which
displace the ground through which they are being driven. Driven
steel piles take the form of steel beams (H piles) or tubes or box
sections driven into the ground, the tubes and box sections are
usually filled with concrete. H section Steel pile Typical box
section steel pile
Slide 119
PILED FOUNDATIONS DRIVEN PILES CONTINUED Alternatively the
piles may be made of pre-cast concrete, often pre-stressed,
suitably strengthened to withstand the blows from the driving
hammer. Piles formed by driving pre-cast hollow concrete sections
or steel tubes, (either extracted later or left in situ) in which
concrete is then used to make up the shaft, these are known as
driven cast-in-situ piles. Pile driving equipment consists of a
piling frame, which has the function of guiding the pile at its
correct alignment from first pitching in position to its final
penetration, a driving hammer and a multi-drum winch for handling
the hammer, lifting a pile and also to operate the travelling,
slewing and raking gear on the rig. There are many designs of
custom-made driving rigs available.
Slide 120
PILED FOUNDATIONS DRIVEN PILES CONTINUED Often piles are driven
by means of purpose adapted site cranes on which are mounted
leaders, which are the essential parts of a piling frame consisting
of stiff steel beams usually of channel, box or tubular section.
BORED PILES These are formed by boring a hole in the ground and, if
necessary, inserting a steel lining (which is often retracted
later) to prevent the sides from collapsing. After boring the hole,
steel reinforcement is inserted and the hole filled with
concrete
Slide 121
PILED FOUNDATIONS BORED PILES continued Power driven auger
rotary drills are suitable for installing bored piles in clay soils
and a wide range of machines are available. For drilling through
sands, gravels and loose rock formations, the pile boreholes may
require continuous support by means of a casing which is driven to
the required depth into the ground and the material within the
casing is removed by grabbing or auger drilling tools. Small
diameter piles of up to 600mm diameter requiring continuous support
by lining tubes (casing) may be bored using simple tripod rigs. The
leading tube has a sharpened cutting edge and is driven down under
the impact of a heavy drill stem. In clays, the soil which jams
inside the tube is prised out by spade when the cutter is raised to
the surface; in ground lacking in cohesion the cutter is provided
with a flap valve to retain excavated material which is emptied at
ground level merely by releasing the flap.
Slide 122
PILED FOUNDATIONS PILE CAPS The purpose of a pile cap is to
spread the load imposed upon it onto a group of piles so that, as
far as possible, the load is shared equally between the piles. A
pile cap also accommodates deviations (within specified tolerances)
from the intended position of piles and by rigidly connecting all
the piles in one group by a massive block of concrete, the
ill-effects of one or more less than fully effective piles are
overcome by redistributing the loads. A piling contractors work is
usually confined to the installation of the piles themselves.
Cutting them down to level and constructing pile caps is normally
undertaken by the main contractor.
Slide 123
PILED FOUNDATIONS PILE CAPS CONTINUED Pile caps are constructed
in many shapes and sizes, some large and spread over a number of
piles e.g. in heavy foundations for reaction vessels in process
plants or boiler and generating equipment in power stations, and
others quite small supporting single light duty columns or small
items of machinery. The minimum number of small diameter piles
permitted on an isolated pile cap is three; caps for single piles
must be interconnected by ground beams in two directions and for
twin piles by ground beams at right angles to the common axis of
the pair.