An investigation into the nature of Contractor's All Risks insurance, with particular reference to civil engineering and building risks
Date
2015-01-07
Authors
Beeby, Ronald, Eugene
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Abstract
The prime goal of this project report is to investigate whether it is sensible
for contractors to utilise the facilities offered by Contractor's All
Risks (CAR) insurance; following an outline of the main characteristics of
CAR, the approach adopted refers mainly to an investigation of accidents
and losses that have occurred on civil engineering and building projects
and relating these incidents to the cost of insurance of each project.
Research for this investigation concentrates primarily on conclusions that
become evident from analysing, on a worldwide basis, the number of losses
Chat have occurred per site during the course of construction of various
types of civil engineering structures (such as dams, tunnels, harbour
works) and buildings (such as high rise office blocks). A statistical model
for each kind of structure is then drawn in graphical for it to enable the
reader to ascertain the appropriate minimum insurance premium (or rate)
related to the minimum corresponding deductibles.
Deductions made from these statistical models indicate that the premium
rate and corresponding deductibles vary from high values for exposed risks
such as dams and harbour works, to lower values for less exposed risks such
as office buildings.
In conclusion, the findings of this investigation indicate that due to the
high number and high costs of losses, especially on exposed risks, Contractor's
All Risks insurance is indeed not only viable, but highly
recommended.