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Special project delay insurance for special risks

Protection against delays due to riots, looting and more.

There are many risks associated with running a construction company. After civil unrest wreaked havoc in South Africa in June and July this year, construction company directors may be asking themselves: “What would happen if we should have to temporarily close our construction sites because of civil commotion, public disorder, rioting, looting, labour disturbances, strikes, a lockout – or even an act of terrorism?”

Has your client planned for business interruptions of this kind? Have they considered how to manage the regular costs of paying themselves, their staff or for the plant that they have hired for the job? How will they pay expenses like medical aids or regular services accounts? Help them to avoid a temporary closure turning into permanent one – or even bankruptcy – with SASRIA’s business interruption insurance.

The South African Special Risk Insurance Association (SASRIA SOC Ltd) is a state-owned company. It is also the only short-term insurer that provides this type of special risk cover through their network of agent companies and brokers. Well capitalised, at the time of writing SASRIA boasts a capital adequacy ratio of more than three times and have adequate reinsurance programmes with A-rated reinsurers.

The SASRIA Construction Business Interruption ‘Project Delay’ policy is a stand-alone product with its own terms and conditions. It provides cover against financial losses due to the interruption of or interference with the services of a construction business due to specific special risks. As well as losses, the policy will also cover necessary and reasonable expenses, called standing charges, which may be claimed for should instances associated with defined special risks cause delays to projects.

This policy allows clients to specify which standing charges in the schedule should be covered during the indemnity period. These include regular, fixed business expenses including, but not limited to, directors’ fees and wages; medical schemes and pensions; interest on loans and bank overdrafts; rent; rates and taxes; rentals and subscriptions; utilities like telephone accounts; and other regular expenses. A contracts works policy must be in place with SASRIA to successfully claim for these standing charges.

Cover for ‘increase in cost of working’ can also be added. This cover may be used to fund extra security guards; the temporary employment of additional workers; overtime payment; and the hire of plant or equipment. Where the plant rental agreement stipulates that the insured (main contractor) must insure the property and/or be responsible for it at an agreed value, this will be the insured amount reflected on the schedule.

At an additional premium, the main contractor may, as the insured, also insure subcontractors under the project delay policy up to a maximum of R50 million.

Please contact us for advice and assistance with securing SASRIA contracts works and project delay policies. We will work with you to ensure that your clients’ companies, projects and most valuable assets – their workers – are protected against special risks.