Liga Asuransi – Dear reader, how are you? Continuing the previous discussion, we will be discussing one of the requirements of CAR / EAR / TPL insurance, which is the reporting of accidents.
We all agree that the main reason a person buys insurance coverage including CAR/EAR/TPL insurance is to get financial compensation for accidents that may occur on the insured project.
However, often happens the insurance buyers are disappointed because the insurance company was not willing to pay for the damage. Even though the accident was unexpected and sudden. Why?
Frankly, rejection as above can happen many times. One of the reasons is that you are late in notifying the insurance company so that it exceeds the time limit written in the insurance policy.
Well, you need to know that every insurance policy has requirements about the deadline for reporting insurance claims. Some are very short for example within 24 hours, 3 times 24 hours, or longer.
To find out more about the current claim reporting deadline, we will discuss it thoroughly in this article.
If you are interested in this article, please share it with your colleagues so that they also understand like you.
Before we discuss specifically the deadline for reporting claims, it’s a good idea to understand CAR / EAR / TPL insurance policies in advance.
What is Contractor’s All Risks (CAR/EAR/TPL) Insurance?
Contractor’s Erection All Risks and Third-Party Liability or known as (CAR/EAR/TPL) insurance policy is an insurance policy that provides reimbursement for damages and loss and lawsuits due to injury, death, or damage to third party property.
These include property damage, including structural construction work and materials, damage, and damage to temporary work carried out at the project site.
Why CAR/EAR/TPL Insurance is Needed?
Because even though your company is the most experienced contractor but know that every construction project’s risks are different, but generally each has threats and risks of almost the same type, such as risks due to natural disasters, contractor mistakes, subcontractors, interference from outside parties, misappropriation of construction equipment and other causes.
Without a CAR/EAR/TPL insurance, you may not be able to fulfill your obligation to complete the project in accordance with the contract within the specified time and in turn may result in you being hit with fines and penalties.
Is it the owner or contractor who purchased the CAR/EAR/TPL insurance policy?
In general, there are two parties involved in a construction project. The first party is the owner (owner) or developer (developer) and the second party is the contractor as the project executor.
Well, both parties need CAR / EAR / TPL insurance coverage because they do not want financial losses in case of an accident. And both parties are also entitled to purchase a CAR/EAR/TPL insurance policy. But the insurance policy needed is just one, then who is the most entitled to buy insurance?
The certainty of who will arrange insurance for the project is usually stated in the contract. But in general, in Indonesia contractors are the most often assigned to buy CAR / EAR / TPL insurance. Therefore, please check your contract.
The next thing that needs to be considered by the contractor (if appointed to provide insurance) is how to buy a CAR / EAR / TPL insurance policy? Frankly, it is not easy to get this type of insurance because it is a high risk.
Not many insurance companies are interested and if there are they cannot provide large protection, or guarantee, only a part of the value of the project. The bigger the project value, the more difficult and complicated it is to get a CAR/EAR/TPL insurance guarantee.
As the solution, it is best to use only an insurance brokerage company that is well versed in the field of construction risk. The number is not much, but there are specialist brokers in this risk area. They successfully provided CAR/ER/TPL insurance policies for various types of projects with a small value of up to trillions of rupiah. For your project contact an insurance broker now.
The insurance policy that we will discuss this time is the car/EAR/TPL Munich Re standard wording insurance policy that is the most widely used in Indonesia and in the world. Actually, there are several policy wordings models that exist.
We discuss the deadline for reporting accidents in the General Conditions section at the beginning of the Munich-Re insurance policy Wordings.
Original Wordings Munich Re
- In the event of any occurrence which might give rise to a claim under this Policy, the Insured shall:
- immediately notifies the Insures by telephone or telegram as well as in writing, giving an indication as to the nature and extent of loss or damage.
General Conditions
In this section, the insurance policy describes the provisions at the time of reporting claims. If you see any signs of an accident or event leading to an accident, then you are asked to immediately notify the insurance via your insurance broker.
Reporting does not need to wait until there is an official report or accident certificate or news of the accident event made by the appropriate authorities.
For the initial report, it is enough to notify orally by phone or with existing communication tools such as for example now there is a WhatsApp application, email, and others. The report is enough as it is a preliminary report.
Why should the report be delivered as soon as possible?
First, because all parties including insurance may still be able to try to reduce or stop accidents that occur if they get reported earlier.
Second, because in the insurance policy there is always a provision for the deadline for reporting claims, if an accident is reported after passing the specified time limit, the insurance can reject the claim.
Usually, the provisions of the insurance policy contain the provisions of the claim reporting limit within 24 hours, or 3 x 24 hours, 7 days, or 14 days. But usually, insurance only gives a time limit of 3 days or 3 times 24 hours. That time is considered enough for the insured to report. Especially in the age of advanced information technology like today.
To ensure what time is best suited for your project an insurance broker will give you advice.
What is the definition of the event (occurrence)?
According to the definition of the event, insurance is one event that causes the onset of insurance.
In CAR/EAR/TPL insurance, events include natural disasters such as floods, landslides, earthquakes, fires, explosions, collapses of construction equipment, being hit by vehicles, riots, and other people’s malicious intentions demands from third parties.
Claim Examples
If one of your projects, it was rain for several days which causes a puddle that closes the entire surface of the project. The water continued the pile of project materials and damaged the work that had been done a few days earlier.
The accident can be ascertained and guaranteed by the CAR /EAR/TPL insurance policy. Well once you know of this accident then you immediately notify the insurance. And since you use the services of an insurance broker, then tell your insurance broker immediately.
No need to wait for an official report from the project leader, anyone you know the insurance broker can reports the incident.
There is no need to make an official report, just by calling, sending messages via SMS, WA, voice notes, and others. This is to avoid delays in reporting so that your claim is not rejected because it is too late to report an accident.
There are often mistakes in this kind of atmosphere. There are still many who assumes that claim reports are reports issued by project leaders and other authorities.
Please note that there is no such provision in the insurance policy, anyone can represent the company to report an accident.
Yes, a full and official report will be needed later when the claim settlement process has already begun.
What is meant by “per event” in insurance?
In addition to understanding the reporting time, you also need to understand what is meant by events (occurrence) in the CAR / EAR / TPL insurance policy.
Occurrence is important because it relates to calculating the own risk or deductible of the insurance policy.
A deductible is a sum of money that is on your own responsibility (own risk) in the event of an accident. That is, you also bear the loss in case of an accident. The own risk provisions are written in every general insurance policy.
The amount of own risk for a CAR / EAR / TPL insurance policy is usually in two forms, first in the form of a sum of money such as USD 2,500 for each event. Second in the form of a percentage of the number of losses incurred, for example, 10% of the value of the claim. If the claim is USD 100,000 then you bear 10% which is USD 10,000 and the claim paid by the insurance company IS USD 90,000.
How to get the best CAR /TPL insurance in Indonesia?
The best way to get CAR /EAR/TPL insurance coverage is to use the services of an insurance broker company that is experienced in the field of construction risk.
An insurance broker is an insurance expert who understands all aspects of insurance including legal aspects, technical aspects, financial aspects, and business aspects.
One of the advantages that can be provided by insurance broker companies is that they also at the same time act as insurance advocates in the process of settling claims to defend your interests.
Knowledge, experience, and a wide network in the insurance industry, it is very helpful in facilitating and speeding up the process of resolving insurance claims.
Frankly, there are not many insurance brokers companies that have special expertise in construction risk. One of them is L&G Insurance Broker.
For all project insurance, you contact L&G right now!
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