Principal Controlled Basis
Principal Controlled Insurance is designed for large development and construction projects with heavy financial requirements or where the Principal wishes to control the cost and extent of coverage provided.
Unlike traditional Project Insurance which insures the contractor and consultants, this type of insurance program insures the Principal as the insured and is extended to include Contractors & subcontractors with other professionals being added if required.
Traditionally, Principals have made it a contractual requirement for contractors and consultants to arrange and pay for the cover for the construction contract. The contractor will then build the price of the cover into the contract price.
However, by relying on contractors and sub contractors to place their own cover, this arrangement can cause significant problems for Principals, such as:
- Inaccurate description of the professional services being carried out,
- Inadequate cover for the work being undertaken or values at risk
- If the contractor has a policy covering a number of sites or if the cover is on an annual basis the potential for the exhaustion of any aggregate limit under their annual policies from a claim or claims not relating to the principals specific contract
- High deductibles
- Unexpected exclusions such as property damage and/or injuries or specific trades
- Unreasonable conditions such as loss mitigation
- Contractor not arranging the cover
Therefore, getting Principal Controlled Insurance gives the Principal full control over their insurance program and the costs involved with the cover.
