Design risks in the installation sector? Choose certainty!
Companies in the installation sector do all they can to avoid damages with preventive measures. But still, risks are there. These sometimes lead to unexpected damages and claims, both small and large. Especially when different chain parties such as construction, infrastructure and installation work together, shifting roles and responsibilities. This results in a complex set of contracts, terms of delivery, specifications and insurance policies. Moreover, the energy transition requires innovative technology and the design of increasingly complex installations. Therefore, this time we focus on design risks and how to manage them.
In the design phase, companies sometimes make unexpected mistakes that cause damage during, but also after delivery. After all, more and more companies are collaborating in digital design systems such as BIM. An increasing number of parties in the installation sector also have their own design departments. This is where small mistakes can be made that lead to major consequences and claims. For example, of material damage due to structural collapse, subsidence and moisture problems. But also non-material defects that stem from the design and need to be repaired.
Construction All Risk insurance (CAR)
If material damage occurs during the construction period due to a design defect, Construction All Risk (CAR) insurance often covers it. Coverage during the insured maintenance period of CAR insurance is also possible. Perhaps your work is insured on the main contractor's or client's CAR. Are you not co-insured? Then taking out your own CAR insurance is an option. There are also main contractors or clients who require this from you. CAR insurance is therefore the usual all-risk insurance for companies in the construction and installation sector. You can take it out as continuous insurance for all your projects, or as temporary, expiring insurance for one project
Transport and installation insurance
Nevertheless, there are projects in the installation and assembly sector where your own CAR insurance is too extensive. In such cases, transport and assembly insurance suffices. The emphasis then often lies on the transport risk, with subsequent assembly activities also being insured.
Risk and contract management
Design insurance also offers contractors the opportunity to insure against material and financial loss due to design errors. And again, as an installation company, you may or may not be co-insured. Once again, it makes it clear that you need to know who has which responsibilities for each project. And who runs which risks and needs to take out which insurances. Someone should also check whether these insurances are in line with the contractual requirements and agreements made between the contractor and installation company. This makes not only risk management, but also contract management essential.
Expertise and custimisation
Which insurances are most suitable is therefore always tailor-made. Meijers is happy to assist you with years of expertise and experience in your sector. We can make comparisons based on similar cases and share previous practical examples with you. In the event of unexpected damage, you can count on careful and fast claims handling. Moreover, we monitor your company's claims progress. We see this as a valuable measuring tool, which you may use to make adjustments in your contract management. This provides confidence towards insurers and can have a positive impact on the premium.
‘Which insurance is the most suitable is always tailor-made’
Any questions?
Do you have any questions after reading this blog? Or would you like to know more about any of the topics covered? If so, please feel free to contact us.
