Insurance trends for construction and engineering projects

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Shibuya Data Count

Sep 14, 2021, 04:25 EST

Shibuya-ku, Tokyo, Japan, Japan, Sep 14, 2021, 04:25 /Comserve / -- This insurance indemnifies the Expected Gross Profit (from leases), including the cost of capital, when the delay is due to damage covered by the policy (e.g. earthquake or flood).

Delayed Start-Up Insurance (DSU)

Protects the investor, guaranteeing the expected profit from the expected date of completion of the project. Accidents that may occur during the construction process, such as flooding or construction failure, could eventually delay the completion date of the project and thus delay the expected cash flow by not starting the leasing of offices or flats. This insurance indemnifies the Expected Gross Profit (from leases), including the cost of capital, when the delay is due to damage covered by the policy (e.g. earthquake or flood). It is used in industrial investments (manufacturing, mining, and heavy industry) and real estate investments.

Purchasing real estate insurance implies entering into a contract with an insurance company.

Construction Liability Insurance

This has been more in demand and is mainly sold to contractors. The dynamics of construction, with machinery and equipment operating in crowded urban centers, means high exposure to third-party damage (adjacent buildings, passers-by, and even subcontractors operating on the same site). This exposure can be limited with Construction Liability Insurance.

Professional Liability Insurance

Protects the investor or construction company against possible claims for errors or omissions that may arise in the future as a result of errors in the design or calculation of professionals.

Construction Insurance

Protects material damage during construction, avoiding unforeseen disbursements in the investor's cash flow.

Construction performance guarantee policies

These are policies that cover the completion of construction work. For example, banks lend money to a contractor, and the financial institution ensures that the loan is honored by requiring a guarantee policy.

Due to the increased awareness of civil claims by contractors, investors, and professionals such as architects, engineers, and estimators, we project that this market will have a lot of growth potential, as these policies offer peace of mind to the parties involved, should a claim occur. There is also a growing concern to mitigate risks and provide greater predictability in long-term business.

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