Although it is not compulsory at present, Comprehensive Construction Insurance is highly advisable for all companies engaged in construction and the development of buildings, homes and, in general, any civil engineering project. Its main advantage is that it covers virtually all the damage that can occur while construction work is taking place, which clearly brings greater peace of mind to those investing in such projects.
What is Comprehensive Construction Insurance?
The definition of Comprehensive Construction Insurance is very clear and specific. It is an insurance policy that focuses on construction works and civil engineering projects, covering virtually all types of damage that can occur accidentally or unforeseeably while work is in progress, including most natural phenomena.
It is important to stress that Comprehensive Construction Insurance is very flexible and can be extensively customised, making it suitable for practically any type of project or customer, including special or very specific requirements.
What aspects does Comprehensive Construction Insurance cover?
Comprehensive Construction Insurance covers a wide range of material damage that can occur accidentally or unforeseeably during construction work. The aspects covered by a standard Comprehensive Construction Insurance policy are called basic guarantees and cover the risks that are common in most types of construction work.
Basic or conventional risks: explosions, fire, vehicle collisions and other impacts.
Risks caused by natural phenomena and by force majeure: rain, floods, wind, rivers overflowing, subsidence, earthquakes and landslides.
Risks arising during the execution of the work due to defects in materials, errors by the workforce and design flaws.
Additional expenses caused directly by an incident for which compensation is payable under the policy: demolition, removal of debris, disposal of scrap, mud removal and firefighting.
Any other accidental, unforeseeable and sudden cause that is not expressly excluded in the policy.
As well as these basic guarantees, customers can contract additional optional guarantees, such as: strikes, damage to construction equipment and machinery, extra-contractual civil liability, or temporary extensions of cover. For example, cover for fire and some other risks can be extended for one month after completion of the work.
Other important aspects of Comprehensive Construction Insurance
Comprehensive Construction Insurance covers specific contingencies in the construction sector and is aimed at and recommended for builders and developers, as they are making the investment and have a special interest in not running unnecessary risks. The constructor is normally the policyholder.
The policy must be taken out shortly before work begins and a completion date must be specified. Both dates must be clearly indicated in the policy, as it only covers accidents occurring between the start and end dates (unless an extension is contracted as an additional guarantee).
Comprehensive Construction Insurance is not compulsory, but it is highly advisable to cover investment (which may be substantial) and damage occurring on the site (which is quite common).
Contracting Comprehensive Construction Insurance does not exempt builders and promoters from their obligation to have Civil Liability Insurance, as established in Article 1902 of the Civil Code. It should not be forgotten that Comprehensive Construction Insurance and Civil Liability Insurance are different products providing different cover.
The purpose of Comprehensive Construction Insurance is to cover the material damage and losses that can occur while work is in progress, provided that they occur for the reasons referred to in the basic guarantees, or for other reasons, if the customer has taken out appropriate additional cover. Compensation is basically payable for accidents, fire or natural disasters. However, it can also cover other risks, such as theft, vandalism, issues arising from defects in materials, or other additional guarantees agreed between the insurer and the customer.