Building Design and Construction Handbook - Merritt - Ventech!

17.46 SECTION SEVENTEEN
TABLE 17.1 Typical Insurance Needs of Parties to Construction (Continued)
Type Purpose
Suggested limits for
small-to-mediumsize
company
Owner insurances
Loss of use insurance Losses in property Approx. Loss of
as result of fire or
other loss
income
Steam boiler Explosion, etc. $500,000
Nuclear incident Nuclear reactor loss
(if required)
High
* B.I. � bodily injury
† P.D. � property damage
‡ HMO � Health Maintenance Organization
Basis for
premium
1. Extended coverage endorsement, which insures the property for the same
amount as the basic fire policy against loss or damage caused by windstorm, hail,
explosion, riot, civil commotion, aircraft, vehicles, and smoke.
2. Vandalism and malicious mischief endorsement, which extends the protection
of the policy to include loss caused by vandalism or malicious mischief. There is
a special extended coverage form that provides coverage on an all-risk basis and
includes the peril of collapse.
Completed-value and reporting forms treat foundations of a building in the
course of construction as a part of the Builders Risk Value for insurance purposes.
But all work below the lowest basement slab, site work, and demolition are not
covered by Builders Risk Insurance. The value of these items should be deducted
from the amount of the policy. This will result in a saving of insurance premium.
Builders’ machinery and equipment should be specifically insured as a separate
item if coverage is desired under the policy.
Under the terms of the AIA General Conditions, the owner is to provide the
Builders Risk Insurance and pay for it. Under those circumstances, the contractor
should request that the following clause appear as an endorsement to the policy:
Additional insureds under this policy: The Contractor and its Subcontractors, as
their interests may lie.
This endorsement will assure the contractor and its subcontractors of a share in
the insurance proceeds in case of claim. It further protects the contractor and subcontractors
from suit by the insurance company under its subrogation clause, should
either of these parties have caused or contributed to the loss.
17.15.2 Insurance for Contractor’s Equipment
The so-called Inland Marine insurance market is the place to look for many coverages
needed by contractors. From the insurance point of view, each contractor’s