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Building & Engineering Insurance

In the construction and engineering industries, there is big money invested into each project and there is no room for error in any end product. Buildings have to stay standing, bridges have to withstand the elements and tunnels can't just crumble. Building and engineering policies cover the builder against any issues that arise with a construction. This type of insurance also covers engineering equipment that can cost millions of dollars. Standard business policies will not cover machinery like tunnel borers as they are so costly to replace. The last aspect that it covers is liability against the work of contractors.

Who is a potential candidate for this type of policy?

This kind of insurance is not mandatory but when calculated against the cost of not having cover you will see why many engineers have taken this option. Standard business or construction insurance will only cover so much. Building and engineering insurance will mean that you can fully recoup their losses in the event of a major disaster.

What typically does a policy cover?

Your building and engineering equipment including custom and specialist equipment is covered against accidental damage, theft, vandalism and extreme adverse weather. As these pieces of equipment you would have to list each one used to ensure full coverage.

You are also covered against any risk the engineering or building structure will be damaged, deteriorate or collapse for reasons other than wear and tear. Basic policies will not cover terrorism, acts of god or war.

You are covered for any public liability that arises from the construction and are fully covered for subsequent legal and medical costs and compensation that may arise from such an action.

What typically does it not cover?

Building and engineering insurance will not pay out against liability or negligence if a prior pattern of substandard workmanship has been demonstrated or if deliberate negligent behavior is displayed. Those are usually the only exclusions with all other eventualities being including in your typical policy.

Additional coverage that policy holders might take out in this area

Many people that take out this type of policy also consider taking out professional indemnity insurance. Your current policy will cover you to a great degree but with indemnity and liability payments being so significant at this time you cannot schedule how high claims may be against you. This is especially true if you are involving in the construction of a large building, a bridge or a tunnel. A liability policy will cover you in the tens of millions dollars.

Additional coverage for a building and engineering insurance policy

Policies are tailored specifically to cater for the unique elements of your project. All inclusions should be detailed at the very beginning of the project and no additional coverage will be necessary.

What will it typically cost?

Building and engineering cover is usually a percentage of your total construction budget. The size of the percentage is wholly dependant to the scope of the project at hand and determined by the level of coverage required and the insurer you choose to go with. Typically you will pay between 2% and 5% of the coverage you require.

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