DEFECT EXCLUSIONS IN CONTRACT WORK POLICIES

The need for risk balance and transfer of risk in highly invested construction projects has resulted in the fast growth of construction insurance industry, particularly in the developed markets. This growth can be a boon or turn out to be a false hope, either of which depends on the care taken while the insurance contract is signed by the client. The reimbursements for insurance claims are solely dependent on their exact written inclusion in the insurance contracts, especially in mature markets such as the U.S. and Australia. Defect exclusions often prevent the construction procurement team, from seeking proper claim for damages. This White paper highlights the possible loopholes and the most common mistakes made by US insurance procurement team, after effects of the mistakes and the ways to overcome them.