Here is the Insurance Coverage Required for the Project – Project Insurance

Liga Asuransi – All project development work, whether civil, construction or engineering, faces high risks. Even though careful work planning has been made, carried out by experienced contractors and using good materials, unfortunately all this cannot prevent accidents from occurring. Therefore, to reduce the impact of financial losses, every project must be insured, known as project insurance or project implementation insurance. Because there are so many risks faced, help from a company is needed by an insurance broker in Indonesia with experience in managing all project insurance guarantees.

There are many risks that can occur in implementing a project. Starting from risks due to errors in tender implementation, design, accidents during land preparation (land clearing), foundation excavation, fencing and construction implementation until completion. Among the risks that can occur are those that can be overcome before project implementation, including making a complete and comprehensive design by an experienced consultant. Location selection, contractor selection and formation of the project management team. Meanwhile, physical risks and financial risks can be transferred to the insurance company. 

The following are several types of insurance needed to protect a project: 

1. Professional Indemnity (PI) Insurance

This insurance provides coverage for errors and omissions made by the parties involved in the project. Planning consultants, architectural consultants, other consultants and including contractors. What is guaranteed is the quality of the work. If the designs and recommendations they provide cause damage or claims from third parties.

1. Surety Bond

Usually the contractor who will be appointed as the project implementer is selected through an auction (tender), to ensure that the company that wins the tender will carry out the project according to its bid, they are asked to provide collateral in the form of a surety or bank guarantee. If they fail, then the collateral will be cashed. Surety Bonds are issued by insurance companies.

1. Performance Guarantee/Bank Guarantee

After the contractor is appointed, to ensure the contractor is able to complete the project in accordance with the contract, the contractor is asked to provide Implementation Guarantee in the form of a Bank Guarantee. Bank guarantees can be issued in the form of contra bank guarantees in collaboration between banks and insurance companies. In terms of cash flow contra bank guarantee, it is very easy for contractors because the collateral is provided by the company, the contractor only needs to pay the insurance premium and bank fees. 

1. Advance Payment Guarantee

If an advance payment is agreed in the contract, to ensure that the contractor will use the money in accordance with the contract, the owner usually asks for a bank guarantee. Like a performance guarantee, this guarantee can also be issued in the form of a contra bank guarantee. 

1. Construction Erection All Risks/Third Party Liability (CAR/EAR/TPL) Insurance 

Before the project begins, ensure that CAR/EAR insurance is in place. Risks can occur at any time, even though the volume of work is still small, the potential risk remains high, especially the risk to third parties (third party liability).

1. Construction Plant and Equipment All Risks

All construction equipment used on the project must be insured before being operated. There are many risks that occur, such as fire, rollover, collision, equipment damaging the project, natural disasters and so on.

1. Goods Transport Insurance – Marine Cargo Insurance

Every item sent for special projects for Mechanical Electrical components, Structures, plants and others must be insured against risks that may occur while on the way to the project location. 

1. Employment Insurance –BPJS-TK 

To protect every worker involved in the project, make sure that they are all guaranteed by the BPJSTK government program. Insurance processing goes directly to the BPJSTK office 

1. Insurance for equipment belonging to other contractors

The bunkhouse building and its contents, contractor’s stock of materials and others are at risk of fire, theft, natural disasters and so on. The insurance guarantee is in the form of a Commercial All Risks insurance policy.

To be able to provide all insurance guarantees, the services of an experienced Indonesian insurance broker company are required. They can design extensive insurance coverage, competitive premium costs, fast service and assistance in the event of a claim. Contact an insurance brokerage company now.

If you are interested in this information, please forward it to your colleagues so they can get the best insurance guarantee for their project.

For your ship’s P&I Insurance needs, contact L&G right now!

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