By: George Jennings & Kobus van Niekerk

The construction industry holiday is a period when most contractors, sub-contractors, architects, quantity surveyors, engineers, and other professionals in the construction industry, enjoy a well-earned break.

From the middle of December until the middle of January each year, nearly all construction sites shut down. During this period, there are perils and risks which can occur. Now is the ideal time to prepare for the fortuitous and unforeseen:

• Elemental perils / natural catastrophes: storm, wind, hail, flooding, fire, snow, earthquake, earth tremor, cyclone, tornado, etc.
• Human risks: theft, malicious damage, vandalism, riot, strike, civil unrest, etc.

These risks are a reality and can happen at any time. Most insurance policies contain conditions which point to ‘due care’ which imposes a duty on the Insured to take measures to prevent loss or damage. It can happen that Insurers / Underwriters question this point when a claim is presented. Consort would like to share some of these ‘onerous’ requirements with our Brokers and clients in preparation of the extended shutdown period in the construction industry.

Our readers will recall pointers and cautionary notes relating to insurance matters, including the terms and conditions of policies. The following guidelines and considerations function as an important refresher ahead of the December holiday:

1. Storage of Building Materials – irrespective of materials being stored on or off site, it is important to ensure it is out of sight and not vulnerable to elemental perils such as storm, flood, and fire. ‘Perishable’ materials like cement, should be stored on pallets well above ground level and undercover, or sufficiently wrapped to avoid ingress of water and / or flooding.

2. Storage of Construction Plant and Equipment, and Tools – all plant and equipment, and tools should be adequately secured where theft, fire, flood, and storm are major risks / exposures. Theft is a serious peril which can range from tyres and batteries to small portable tools, particularly when sites and client premises are unattended. Some policies, especially plant policies, contain an accumulation storage clause monetary limit which should be adhered to.

3. Contract Sites – physical sites are equally vulnerable to all kinds of perils, including fire and flooding. On-site security and patrolling guards, backed by direct communication with a reactive unit, can be of huge benefit. Emergency contact details for backup assistance and / or a risk mitigation programme, should be considered. Contract sites in a very ‘raw’ stage, such as civil and earthworks risk, should have adequate drainage and runoff in case of heavy downpour or flood risks. It is not always something that can be controlled, but rain gauges and regular monitoring are recommended. Insurers / Underwriters will (as far as possible) require accurate details about the date and time of when the loss or damage occurred.

4. Buildings / Premises – check that alarm systems are fully operational and comply with the policy warranty (where applicable). The failure or breakdown of an alarm system can leave your premises without protection against theft. Your theft claim can also be compromised or prejudiced if the alarm system was ‘out of service / action’ at the time of any loss or damage. Even though we are currently experiencing ‘full power’ from our utility supplier(s), it is no foregone conclusion that electricity will not be interrupted and standby batteries drained, resulting in a ‘dead’ alarm system. It can also be a case of stolen cables or a damaged sub-station that interrupt the flow of electricity to your premises.

5. Electronic Equipment – make sure all equipment is stored safely and power surge / lightning protection devices comply with a policy warranty. Failure to comply with any policy warranty can present technicalities with claims for loss or damage. As we all know, portable equipment (such as, but not limited to) laptops, notebooks, tablets, and cell phones are attractive and sought after when it comes to theft. These items are also prone to accidental damage. When not in use, store electronic equipment in a safe place to prevent or minimise loss or damage.

6. Communication whilst on holiday it remains important to have in place, a responsible person that can be contacted in the event of an unwanted event occurring.

Consort’s offices will close at 12h00 on 23 December 2024 and reopen at 08h00 on 6 January 2025. Should any of our Brokers need guidance and support regarding the above, please contact one of the Underwriters.

Consort wishes all our Insureds and Brokers a well-earned festive break.

Consort Technical Underwriting Managers (Pty) Ltd is an Authorised Financial Services Provider (FSP 2273) and underwritten by Lombard Insurance Company Limited (FSP 1596) an Insurer licensed to conduct non-life insurance business.

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