Current through Register Vol. 47, No. 12, March 26, 2025
During construction period, contractors will continue
to carry forms of insurance referred to under section
1630-2.2 to extent they apply.
Special attention should be given to the following coverages.
(a) Fire and extended coverage insurance.
(1) Before any contractors commence
construction operations, and before materials are delivered to project site,
fire and extended coverage insurance must be obtained.
(2) This should be included in contract as
coverage to be supplied by contractor. It should include name of authority and
division as well as name of contractor. This policy will cover work done on
project as construction proceeds, as well as materials on project site, and may
include contractor's equipment.
(3)
This policy may be obtained on either completed value or on monthly reporting
form. Completed value form is preferable as it eliminates requirement on part
of contractor and authority of filing monthly reports indicating value of
completed work. In addition, it is usually much lower in cost. Regardless of
which type of policy is obtained, in no event shall coverage be less than full
insurable interest.
(4) Coverage is
to be continued from time contractor starts until time he finishes his work. If
authority determines that a certificate of occupancy issued for a specific
building on project site constitutes completion of contractor's operations
subject to punch list items insofar as that building is concerned, authority
may notify contractor to reduce his builder's risk coverage and simultaneously
authority may then place fire coverage on said building to protect its interest
as owner. There shall be a continuity of insurance.
(5) In event that contractor's equipment is
included in coverage, completed value form must be written in a sufficient
amount to include value of contractor's equipment as well as completed value of
project.
(b) Insurance
on materials stored offsite. Those materials for project that are stored on
project site shall be covered for fire and extended coverage perils under
builder's risk policy referred to above. In certain cases, however, authority
should see that fire and extended coverage, and mercantile burglary and theft
insurance are obtained for such offsite materials. In event that these
materials have been paid for by authority directly, authority should effect
such insurance. If included in contractor's payments, coverage should be
obtained from contractor.
