How does turnover based annual construction all risks insurance programme work?

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A turnover-based annual construction all risks insurance program is a type of insurance coverage specifically designed for construction projects. It provides protection against a wide range of risks and perils that can occur during the course of construction. Here’s how it generally works:

  1. Coverage Scope: The insurance program covers various aspects of the construction project, including the construction site, materials, equipment, and the works being carried out.
  2. Annual Policy: Unlike project-specific insurance, which covers a single construction project, a turnover-based annual construction all risks insurance program provides coverage for multiple projects undertaken by the insured during a specific policy period, typically one year.
  3. Premium Calculation: The premium for the insurance program is based on the insured’s estimated annual turnover from construction projects. The turnover represents the total value of the projects the insured expects to undertake during the policy period.
  4. Declaration of Projects: At the beginning of the policy period, the insured declares the details of the construction projects they plan to undertake during that period. This includes information such as project value, location, duration, and any significant risk factors associated with each project.
  5. Adjustments: If the insured undertakes additional projects or if there are changes in the estimated turnover during the policy period, they are required to inform the insurance provider and adjust the coverage and premium accordingly. This ensures that the insurance coverage aligns with the insured’s actual exposure to risk.
  6. Coverage and Exclusions: The insurance program typically covers a broad range of risks, including fire, theft, vandalism, natural disasters, and damage to property or materials. It may also cover third-party liability arising from construction activities. However, it’s important to carefully review the policy terms and conditions, as there may be certain exclusions or limitations on coverage.
  7. Policy Limits: The insurance program will specify various limits, such as the maximum amount payable for a single claim, an aggregate limit for all claims during the policy period, and deductibles that may apply in case of a claim.
  8. Claims Process: In the event of a covered loss or damage, the insured needs to notify the insurance provider and submit a claim. The insurance company will assess the claim and, if approved, provide compensation as per the policy terms and conditions.

It’s important to note that the specifics of a turnover-based annual construction all risks insurance program can vary between insurance providers and policies. Therefore, it’s crucial to carefully review the policy documents and consult with an insurance professional to fully understand the coverage, terms, and conditions applicable to a particular insurance program.