Construction Insurances Kuala Lumpur Malaysia

Construction Insurances Explained

– Contractors’ All Risks Insurance

Contractors’ All Risks Insurance

There are several terms used in the insurance world that mean different things to different people and one of these is Contractors’ all risks (CAR) insurance. The term is sometimes used to refer to both the material damage and liability covers required by a Contractor. Most insurance practitioners would regard CAR as referring only to the material damage cover on the contract works unless the real intention was obvious from the rest of the text. Anyone using the term, whether verbally or in writing, should make their intention clear, so as to avoid any ambiguity in interpretation.

CAR covers what is stated within the actual insurance policy for which the premium is paid. The Employer has the opportunity to specify his requirements as to what is to be included within the CAR within the contract if the Contractor is responsible for the provision of such insurance alternatively the Employer specifies the cover within the policy he takes out where the Contractor is not obligated to provide insurance under the Contract.

A CAR policy provides insurance coverage when the Works being constructed, as defined in the Contract, are damaged by an insured peril and require replacing and/or repairing. It is normal for the Contract to stipulate who will provide this cover. If it were the Contractor then it would be normal for them to take out a specific policy to cover the project or alternatively if available to them add it to a policy covering all their contracts up to a specific limit. In the event the responsibility should fall upon the Employer then cover would normally be under a policy arranged specifically for that project.

When arranging the CAR coverage for a project it is essential that care be taken in identifying the correct Contract Value, Construction Period, Defects Liability Period and Description of the Works. The policy will normally cover any physical loss or damage unless the cause is specifically excluded, thus the term ‘All-Risks’ whilst commonly used, is to some extent, misleading. Nevertheless the cover is very wide and embraces protection against fire, aircraft, explosion, earthquake, riot, malicious damage, storm, flood, burst pipes, impact and other accidental damage. However, CAR policies can be issued covering loss or damage by particular and specified perils, e.g. fire, flood, storm. In both cases the policy should generally be extended to provide protection in respect of damage by terrorists where such is commercially available.

In addition material damage to the Works or the machinery being erected CAR generally includes coverage for third-party liability for bodily injury and property damage to the surrounding properties. The policy can in some circumstances be extended to include consequential losses or losses due to delay in start-up following loss or damage under material damage section. This cover is also called advanced loss of profit.

Either way it is imperative that the parties fully understand what exclusions apply or which perils are listed to ensure that the cover gives sufficient protection to the Employer and the Contractor. The Sum to be insured under CAR should be adequately calculated and must include at least the Contract Value, value of Contractors’ plant and machinery, value of Employers existing property, estimated cost of debris removal, value of all temporary facilities, tax and an allowance for inflation. In addition it is wise to make sure that on site as well as offsite storage facilities are included under the policy together with the value of any free issue materials where the Employer transfers the risk to the Contractor under the Contract.

The policy should always be in the joint names of the Employer and Contractor although the Contract may stipulate that the Bank or Financing institutions are also named in the policy, depending upon their specific requirements for providing project financing.

Joint names insurance is where two or more parties (for example the Employer and the Contractor) are jointly insured under a single policy. Each party has legal rights under the policy and can claim against the insurer, but the insurer has no right of subrogation against the other insured party.

It is important to remember that each party is bound by the normal rules, and to avoid any difficulties each should individually comply with the duties of disclosure and notification.

Having an interest noted on a policy is very different and is rarely an acceptable substitute for a joint names policy.

A third-party is not a party to the contract of insurance, and thus cannot claim against the insurer. Similarly, it does not prevent the insurer from exercising rights of subrogation against the third-party.

PAM, IEM, FIDIC and generally most standard forms of contract contain fairly detailed provisions for property and liability insurance. Generic amendments to these insurance provisions are not normally essential, however, discreet changes may be required depending on the nature of a specific project (for example, amending the definition of joint names insurance policy to include the project funders, or to reconcile the standard provisions with a project insurance policy taken out by the Employer).

All CAR policies will have an excess that will be deducted from any claim settlement. On occasions insurers will apply more than one excess under a policy for specific losses where a certain risk warrants such and additional excess being imposed.

In addition generally most policies include exclusions for which extensions of CAR coverage maybe granted or included within the CAR coverage of the CAR policy may be extended to cover such as:

(A)        professional fees;

(B)        automatic reinstatement of the policy limit following a loss;

(C)        debris removal;

(D)        free issue materials;

(E)        discovery of munitions of war;

(F)         inflation clause;

(G)        plans and documents;

(H)        others.

Individual insurance providers specialising in this class of insurance will also have their own list of extensions that they will negotiate with insurers. As an example you may refer to the example provided which is so provided as an example and these will vary depending upon the general insurance market at the time the CAR insurance is taken out by the insuring party.

In addition the parties need to consider if the CAR policy is to cover the respective party’s to the Contract for:

Additional cost of construction of un-built works in the event of

(A) Inflationary Costs

(B) Out of sequence working

(C) Defective design, materials and workmanship

(D) Extended defective condition exclusion

(E) Limited defective condition exclusion

(F) Design improvement exclusion

It is understood that various legal challenges are currently on-going as to the validity of these clauses and therefore whilst the description of coverage above may not reflect the current or future legal interpretation. As with all contractual documentation it is recommended that all parties seek professional advice in respect of these risks.

It should be noted here that if the Contractor arranges CAR cover it may restrict or even remove the ability of the Employer to purchase any consequential loss coverage.

Construction Insurances Explained

– Public Liability Insurance

Public Liability Insurance

Typical public liability insurance will provide indemnity in respect of liability at law for damages arising from accidental injury to third parties (not employees) or accidental damage to third-party property arising in connection with the project. It may also cover liability for damages arising out of any nuisance or trespass committed by the insured and any rights (such as a right of way) with which the insured may accidentally interfere in the course of the development. Other elements of cover normally provided include defence of claims costs, the use of plant on the site and legal defence costs in respect of prosecutions brought under the Health and Safety legislation.

Many insurance providers now exclude claims arising from sources they regard as particularly hazardous, such as terrorism, asbestos, gradual pollution, mould, e-commerce transactions and, potentially, financial loss where there has been no ‘injury or damage’ as defined in the policy. Insurers may restrict their liability for particular risks by imposing inner limits much smaller than the overall policy limit.

Public liability insurance coverage may be arranged on an annual basis with a specific limit being the maximum amount payable in the event of any one claim or series of claims arising from one occurrence. It is normal for this limit to apply in respect of any one claim but some limits do apply to all claims in the period of insurance. There may be a limit on any one claim and then a separate aggregate limit. Sometimes there are elements of cover that insurers may be particularly concerned about, e.g. sudden and accidental pollution may be subject to lower limits of liability and/or separate aggregates.

Whatever type is issued, it is the insured party or parties that decide on the level of cover to be purchased dependent upon the risk exposure arising from the work being undertaken. When deciding upon the limits to be purchased it is best not to rely on any figure requested within a contract document, as this is normally the minimum amount required. The policy will normally be subject to an excess that will be deducted from the total amount claimed and may apply only in respect of claims for property damage or in respect of all claims.

Every party on site with a potential liability to the public will require an insurance policy. Additional responsibilities for each party will also be set out in the contract. It is traditional and still common for the Contractor to arrange a cover on behalf of the Employer. However, it has to be asked if this is in the best interests of everyone, whether the Employer who may find he has only nominal cover or a claimant who may find they are passed from one insurer to another if there are different policies in different names. One option is to effect a project policy arranged by the Employer.

The parties protected by the policy will vary according to the Employer’s requirements and the nature of the contract forms being adopted. The indemnity can apply to the Employer only or together with the Contractor, his subcontractors and tradesmen. In addition there may be freeholders, superior landlords, financiers plus professional consultants and suppliers (on site exposures only) to be added to the list of insured. The policy should set out the names of all insured and specify in which policy covers they have an insurable interest.

Public liability insurance is not a cheap insurance and if one party does arrange cover in two or more names the cost of this and the potential savings to the other names should to be reflected in tender prices.

It is important for the Employer to decide responsibilities for placing public liability insurance before contracts are signed, rather than just follow the provisions of the basic contract conditions. Whoever is making the decision as to who must arrange the cover must consider all those who may need to be protected.

Construction Insurances Explained

– Existing Building Insurance

Existing Building Insurance

Where an existing building is to be the subject of Contract Works care is needed by those responsible for drawing up the contract conditions and those responsible for insuring the building. The insurance of new build contract is relatively straightforward compared to the difficulties that can arise when an existing building is being worked upon. Such a building will in most circumstances be insured under a commercial all risks property owners’ policy whilst occupied or temporarily unoccupied pending the works. There will be a number of conditions in that policy that will apply when works are being carried out and these should be examined. If the contract does not involve much of an increase in risk the current insurers may be happy to continue the cover without additional charge but it will require reasonable precautions to be taken. On the other hand if there is hot work involving welding equipment or blowtorches, they may require an additional premium and/or risk improvements. If there are to be structural alterations, particularly if they involve foundations, insurers may wish to reconsider the cover and, say, exclude subsidence occurring as a result of the works. The remaining subsidence risk may then be insured under a non-negligence policy at terms reflecting the insurance providers’ assessment of the revised risk. The specific action will depend on the particular circumstances and the attitude of the insurance provider. However, it is also possible that the current insurer will wish to exclude the cover altogether on the grounds that the building is now a construction risk and best insured under a construction policy. The problem with this is that the construction insurance market does not always have the capacity to insure a substantial building.

Contractors often seek to take out joint names insurance with the Employer in respect of the existing building as they wish to avoid taking out public liability insurance due to the high premiums for a large building. This is all very well if the Employer is also the insured under the policy and is prepared to pay any additional premium and/or to accept restrictions in cover and/or to pay for additional risk precautions during the contract period. Either way it should be made clear that this is at the Employer’s risk.

Problems start if the insurers of the building do not want to carry the additional risk. Alternatively the Employer may not control the buildings insurance and the landlord or freeholder that does may refuse to agree to joint names status for the Contractor. If either of these eventualities arises, a solution has to be found. There are solutions or partial solutions but they may be very expensive and still leave the Employer carrying some risk.

Where the Contract Works will include very little of the original building, perhaps just the exterior walls or the facade, it may be better to cover both the existing building and the contract works under the CAR policy with one sum insured. It should be cheaper and make settlement of any claims easier. A CAR policy is designed for construction works and the cover is drawn up to reflect the risks inherent in construction. There are elements of the cover that may make it beneficial to insure the existing building under such a policy,

The insurance providers for the existing building must be advised of the nature and extent of the Contract Works or the policy could be invalidated. However, it may be better to cover the existing building under an all-encompassing CAR policy, as mentioned above.

Where the Employer is undertaking to arrange a joint names cover on the existing building to protect the Contractor, he should make sure this is possible. If the Employer is a lessee or has not arranged the policy there could be problems that are both time-consuming and expensive for the Employer to resolve.

Construction Insurances Explained

– Consequential Loss Insurance

Consequential Losses Insurance

Property Developers have to carry risks it is part and parcel of their business. The risk due to consequential losses on a construction site is a high one as there are so many factors that could delay completion and then so many headings under which additional expense or actual loss of anticipated income could arise. The measurement of each potential loss can be a problem and if not correctly assessed there may be underinsurance or an unnecessarily high premium being paid.

If any party involved with the construction will require consequential loss cover of any kind it is very unlikely that any insurer will be willing to assist unless it also provides the CAR insurances on the Contract Works. The reason for this lies with the fact that only by the insurer controlling the settlement of the material damage claim can the size of the consequential loss be minimised. Therefore, if the Contract Conditions call for the Contractor to arrange insurance on the works, it may be impossible for the Employer to arrange any consequential loss cover. The Employer will then have to arrange its own cover on the Contract Works in order to secure that consequential loss protection.

To avoid the possibility of the Employer effectively paying enhanced premiums for such Contract Works cover it is worthwhile making clear to the Contractor from the outset that the Employer is paying for its own cover, if this is the intention. The contract price quoted by the Contractor should then reflect this.

It is usually very difficult, if not impossible, to persuade the Contractor to reduce its price at a later date. In any case the Contractor may prefer to arrange its own cover on the Works so that he has control over any claims that may arise. This is understandable and the Contractor may also argue, possibly with some justification, that it can buy the CAR insurance more cheaply than the Employer. Faced with the problems of changing contract conditions, arranging cover on the works and, possibly, paying a higher premium for the privilege, any Employer could be forgiven for giving up the idea of arranging consequential loss cover.

It is not good practice to rely solely on liquidated damages instead. Apart from the fact that the Contractor may find it impossible to purchase insurance against liquidated damages, making recovery of a genuine loss uncertain, there is the possibility that the Contractor will be entitled to an extension of time under the Contract and will not be liable to pay any damages anyway. Properly arranged insurance for consequential losses will more accurately reflect the Employer’s loss than liquidated damages can and by arranging both CAR and consequential loss insurance with the same insurers there is the added advantage that the insurers will be looking for a quick resolution to any CAR claim in order to reduce the size of the consequential loss.

Under all the Standard Forms of Contract commonly used in Malaysia for construction works there exists clauses which make the Contractor obliged to compensate the Employer to the extent of liquidated and ascertained damages at the rate specified in the Contract. However, if the delay is due to certain relevant events an Extension of Time for completion of the Works will be given which will result in the Contractor not being obliged to pay any such damages.

Typically these relevant events would include:

A)  force majeure;

B)  exceptionally adverse weather conditions;

C)  loss or damage occasioned by any one or more of the specified perils (see below);

D)  civil commotion, local combination of workmen, strike or lock-out affecting any of the trades employed upon the works or any of the trades engaged in the preparation, manufacture or transportation of any of the goods or materials required for the works;

E)   terrorism.

Contract Conditions do vary and therefore the proposal that an extension of time may be available is not necessarily correct in every instance.

The specified perils are normally defined as: fire, lightning, explosion, storm, tempest, flood, bursting or overflowing of water tanks, apparatus or pipes, earthquake, aircraft and other aerial devices or articles dropped therefrom, riot and civil commotion, but excluding excepted risks. The excepted risks include, amongst other things, radioactivity and pressure waves.

Force majeure may be defined in the Contract however as all contract are normally executed and subject to the laws of Malaysia consideration should also be taken of the definition of force majeure contained within the Contracts Act and adopted by the Courts. For insurance purposes the principal force majeure perils include: fire and allied perils, strikes, lockouts, labour disputes, change of law, order of any court enforcing a change of law and any other cause beyond the control of the Contractor.

It was possible to buy commercially viable cover for the consequential losses flowing from late completion or permanent abandonment of a project following the occurrence of force majeure perils or restricted to limited specified peril but following some extremely large claims it is now very difficult to obtain such coverage at commercially viable rates.

Where an insurance policy makes reference to All-Risks of Specified Perils the coverage will almost certainly include not just those mentioned above but, in addition, malicious damage, impact, subsidence, landslip, heave and, possibly, other accidental damage. Again such insurance is getting harder and harder to obtain and even flood coverage is being limited after the events of 2011 in Thailand.

Where liquidated and ascertained damages can be applied due to any delay scenario, the reality of the impact upon the Employer’s financial position can often be beyond the level of liquidated and ascertained damages set during tender negotiations. Whilst every effort is made to set the level of damages at an appropriate level, the full consequences are not often appreciated until a loss is sustained. Equally, it can be the case that on smaller projects it is difficult to reach agreement with the Contractor involved for an appropriate level of damages. This is because, if set accurately, they may preclude the Contractor from undertaking the development or, alternatively, the imposition of such damages would adversely affect any tender amount submitted.

Consider the scenario where an Employer is constructing a commercial development and has entered into lease or purchase agreements with a tenant. It may not simply be the Employers loss in rental which needs to be considered but also the tenant’s losses which result from delays. The amount of such damages will depend greatly on the activities and circumstances of the tenant and the content of the Employers lease or purchase agreement with that tenant.

Unfortunately, Employer’s acting as developers often carry more risk than is necessary by failing to insure or insure adequately, even though insurance cover can be purchased. Employers should at least consider taking insurance coverage for the following potential risks:

1)   Loss of Rent/Revenue and Loss of Use of Sale Proceeds, including Assessment of Indemnity Period.

The loss of rental income/revenue income from use or the Employer being prevented from investing or using the proceeds of a sale are straight forward concepts even if their estimation may not be so. The indemnity period refers to the time limit imposed in a policy for which the Employer may claim losses as a result of event which allows the Employer to claim consequential losses. Thus Employers need to consider the period required to rebuild the project or how long it may take for the resale or re-letting following such rebuilding.

2)   Expediting Costs (Additional Cost of Working)

Cover for expediting costs relates to the additional costs in executing and repair or rebuilding works over and above any amount recoverable under the CAR insurance covering the Contract Works. The amount recoverable is generally limited to what is reasonable compared to the saving produced on the claim for losses due to delays in completion. In practice this means that insurers will be reluctant to pay for expenditure that did not produce at least a corresponding saving on another part of the claim.

3)   Costs Incurred in Raising or Extending Loans

The legal and other costs incurred in continuing existing loans or raising new ones as a result of delay by insured damage should also be covered. These may be included within the cover for lost rental income/revenue income or delays in repatriation of proceeds cover referred to above without the need for a separate sum insured.

4)   Additional Overhead Costs

A delay in completion of the Works may incur the Employer in additional costs involving marketing, leasing, selling and legal costs in the case of a developer or where the facility will be used to manufacture or operate a business there could be additional rental costs, redundant employee costs, no productive machinery costs and many other increased overheads.

5)   Higher cost of development finance

Many covers that are arranged which ignore the fact that development finance can cost more than finance secured against a completed project and that the level of borrowing which can be secured against a completed project is normally greater. The consequences of this are twofold. One being the increased cost of borrowing and secondly that more capital is tied up in the project for a longer period as a result of not being able to re-finance the loan against the completed project.

6)   Additional Increase in Cost of Working Cover

It had been addressed that generally the Employer will be limited to reasonable cost of expediting completion of the Works. It may be possible to obtain cover over and above this to further expedite the works by means of an additional item although sometimes the matter is dealt with by means of an extension to the cover with an inner limit. The ability to make a claim under expediting costs might give the Employer useful options in the event of a loss. For example, the ability to make extra payments to speed up completion may enable them to avoid losses in the future that would fall outside the indemnity period.

7)   Damage Away from the Site including Prevention of Access

Where CAR policies exclude coverage for losses that result from damage off site be it to the Contractors’ offices, materials or equipment stored off site, vehicles or plant in transit or whilst stored and damage to other phases of development It is prudent for the Employer to consider extending coverage and also insuring for such events as denial of access and/or failure of utilities.

8)   Damage at suppliers’ premises

Some CAR policies offer limited cover in respect of delays incurred following damage at the premises of suppliers of materials to be used in the Contract Works. The most serious losses are likely to occur if there is a delay in the arrival of crucial or bespoke supplies such as lifts, special equipment and the like. And the limits of cover normally fail to adequately protect the Employer. Accordingly it is prudent for the Employer to consider the purchased sufficient levels of cover for delays as a result of damage to all suppliers to the development not named on other policies although such insurance can be very expensive, especially where suppliers are importing goods from outside of Malaysia.

To summarise an Employer who is seeking Consequential Loss Insurance will be better off arranging the CAR Insurance for the Contract Works or alternatively an all-encompassing Project Insurance. Consequential Loss Insurance is a generally considered a more certain route to recovery of Employer costs than reliance solely on liquidated damages. Consequential Loss Insurance will be a more accurate reflection of the Employer’s loss risks than liquidated damages and finally in Malaysia the recovery of Liquidated damages from a Contractor still requires the Employer to prove his losses if challenged in the courts, thus regardless of the sum stated in the Contract this does not guarantee the amount will be recovered, which will be dependent upon the extent to which the Contractors is liable under the contract for the Employers costs.

In order for the Employer to secure adequate Consequential Loss Insurance at a competitive rate he should ensure that those responsible for arranging the policy have a full understanding of how the project is to be financed, the programming of the Works and the financial implications of any delay.

Construction Insurances Explained

– Workmen Compensation Insurance

for Contractors, Builders & Other Construction Professionals

Construction and contracting professionals know all too well the risks of their industry. From on-the-job accidents to illnesses from handling hazardous materials, even the best-prepared carpenter can be the victim of unforeseen events.

If one of your subcontractors is hurt due to malfunctioning equipment or falls ill due to exposure to asbestos-containing materials (ACM), your construction and contracting business could be held responsible. Workers’ Compensation Insurance is the protection construction and contracting business owners rely on to cover the medical expenses related to an employee’s injury or illness or for the earnings the employee missed while recovering.

Read on to learn how you can protect your construction and contracting business and your employees from uncertainty with Workers’ Compensation Insurance.

Workers’ Compensation Insurance: Protecting Contractors

The dangers of operating industrial machinery, the exposure to potentially hazardous materials, and the toll of repetitive motion injuries are all risks contractors face daily. And while safety training and personal protective equipment are a necessary risk management tools, construction and contracting businesses know accidents happen all the time.

Workers’ Compensation Insurance helps offset some of the risks you can’t avoid by providing coverage that protects your construction and contracting business assets in the event of a costly lawsuit brought by an injured or ill employee. With an adequate policy, you know your construction and contracting business will have the necessary funds to cover court costs and settlements should unexpected accidents and lawsuits occur.

As a rule, Workers’ Compensation is currently necessary for all businesses with employees, though the laws vary from state to state. For example, North Dakota, Ohio, Washington, and Wyoming have monopolistic markets, which means the state sets rates and operates a state-administered fund of Workers’ Compensation Insurance. private employers can choose whether or not to carry Workers’ Compensation Insurance coverage.

How Construction & Contracting Professionals Benefit from Workers’ Compensation Insurance

While some contractors know this coverage as “workman’s comp” or “workers’ liability insurance,” Workers’ Compensation Insurance acts as a safety net for your construction and contracting business by covering the costs of…

Medical expenses relating to the employees’ on-the-job injuries and work-related illnesses. 

Wages your employee would have earned if they were able to perform their work. 

Legal fees should your employee file a lawsuit against your construction and contracting business for their work-related injury or illness.

Because on-the-job accidents can quickly lead to lawsuits, most Workers’ Compensation policies also include Employers’ Liability Insurance. If your injured or ill employee sues your company, this policy will help pay for the legal costs of defending against the claim.

And legal fees add up quickly. Between attorney’s fees and the time lost from work to attend court, your construction and contracting business could suffer a deep financial burden even if the court finds that your business is not responsible for the illness or injury. 

What is Contractors’ All Risks & Erection All Risks insurance? 

These 2 policies are designed to meet the insurance obligation placed upon Contractors under the contract conditions.

• Contractors’ All Risks
  Covers buildings and civil engineering works under construction
• Erection All Risks
  Covers plants, machinery, equipment and steel structures like bridges in the course of erection

Key coverage

Here is an overview of your coverage

Contractors’ All Risks / Erection All Risks

• Material Damage
  Covers against sudden and unforeseen physical loss or damage to contract or erection works/property/items  
• Third Party Liability
  Covers third party liability for which we shall become legally liable to pay as damages consequent upon
• Accidental bodily injury or illness of third party
• Accidental loss or damage to property belonging to third party
  Occurring in direct connection with the works and happening at or in the immediate vicinity of the site.
  The indemnity is also provided for legal costs and expenses provided the liability is within the limit of liability insured.

Malaysia Contruction Insurance, Malaysia Contractor's All Risk Insurance (CAR), Malaysia Erection All Risk Insurance (EAR) and Performance Bond Insurance (IG) arranged by ACPG Management Sdn Bhd

Malaysia Contruction Insurance, Malaysia Contractor's All Risk Insurance (CAR), Malaysia Erection All Risk Insurance (EAR) and Performance Bond Insurance (IG) arranged by ACPG Management Sdn Bhd.

 

 

 

 

 

Construction and Engineering Insurance Malaysia

Contractors' All Risks (CAR)

Contractors' All Risk insurance (CAR) is designed to provide coverage involving construction of buildings and other civil engineering works. It provides coverage against:

• Loss or damage to the contract works caused by any unforeseen and sudden physical loss or damage from any cause, other than those specifically excluded.
• Damage to third party property and/or bodily injury occurring in direct connection with the erection works.

Contractors' All Risk insurance (CAR) policy is designed to provide protection against loss or damage in respect of the contract works at contract site and third party claims arising in connection with the construction of a project.

With additional premium, the cover may include Construction Plant and Equipment, Construction Machinery, Removal of Debris, Professional Fees and Principal’s Existing Property.

Duration Contractors' All Risk insurance (CAR) of cover corresponds with the contract period which is stipulated in the Letter of Award.

PRODUCT DISCLOSURE SHEET
CONTRACTOR’S ALL RISKS
(Please read this Product Disclosure Sheet before you decide to take out a Contractor’s All Risks Insurance Policy.
Be sure to also read the general terms and conditions stated in the policy).

1. What is this product about?
This policy provides All Risks coverage unless specifically excluded under the policy for contractors to meet their insurance obligations under the contract conditions for projects awarded such as, construction of buildings, roads, railway lines, airports, tunnels, bridges, towers, dams, etc.
This policy covers the contract work to be executed in accordance with the contract, any temporary works, construction materials, construction plant and equipment used at the work site and any third party liability arising out of the performance of the contract.

2. What are the covers / benefits provided?
This policy has two sections, namely :
• Section I – Material Damage
It covers any unforeseen and sudden physical loss or damage from any cause, other than those specifically excluded under the policy:
a) to the contract work executed
b) to the contractor’s plant, machinery and equipment used for the contract at work site
c) to Principal’s existing property
• Section II – Third Party Liability
It covers the contractor for all sums which he shall become legally liable to pay as damages consequent upon:
a) accidental bodily injury to or illness of third parties (whether fatal or not)
b) accidental loss of or damage to property belonging to third parties
occurring in direct connection with the construction of the items insured under Section I and happening on or in the immediate vicinity of the work site during the period of cover.
Duration of cover corresponds with the contract period including maintenance period as stipulated in the Letter of Award. You need to purchase a new insurance policy to cover each project undertaken.

3. How much premium do I have to pay?
The total premium that you have to pay may vary depending on the Contract Value, the scope of work of the
project to be executed, the risk exposure, the extensions to basic cover required and the underwriting
requirements of the company:
• Estimated Contract Value
• Rate Applicable _____________%
• Sum Insured for Extensions of cover
• Loadings Applicable to the Extensions _____________%
The estimated total premium that you have to pay is: RM___________

4. What are some of the key terms and conditions that I should be aware of?
Some of the key terms and conditions that you should be aware of are:

• Duty of disclosure - you must give all the facts in your application form fully and faithfully otherwise your policy may be void.

• Duty of Assured – you shall take all reasonable precautions and comply with all reasonable recommendations of the company to prevent loss, damage or liability and comply with statutory requirements and manufacturer’s recommendations.

• You must ensure that your sum insured stated in the Schedule are adequate:

a) Contract Works - full Value of the contract works at the completion of the construction inclusive of all materials, wages, freight, customs duties, dues and materials or items supplied by the Principal.

b) Construction Plant and Equipment - the replacement value of construction plant and equipment, which shall mean the cost of replacement of the insured items by new items of the same kind and capacity.

• Any extension of the contract period may be considered subject to advance notification to the company in writing and submission of relevant documents.

• Underinsurance - if the sum insured stated in the Schedule is less than the amount required to be insured at the time of loss, you are deemed to be self-insuring for the difference. The average condition shall apply in event of a claim.

• Excess - is the amount of loss that you have to bear in event of a claim.

5. What are the major exclusions under this policy?
This policy does not cover certain losses, such as:
a) loss or damage due to faulty design
b) the cost of replacement, repair or rectification of defective material and/or workmanship
c) wear and tear, corrosion, oxidation, deterioration due to lack of use and normal atmospheric conditions
d) loss or damage to construction plant, equipment and construction machinery due to electrical or mechanical
breakdown, effective lubrication or lack of oil or coolant.
e) consequential loss of any kind or whatsoever including penalties, losses due to delay, lack of performance, loss of contract.
f) loss, damage or liability caused by or arising out of :
• war, riot, strike, civil commotion
• nuclear reaction, nuclear radiation or radioactive contamination
• willful act or willful negligence
• cessation of work whether total or partial
(Note : This list is non-exhaustive. Please refer to the policy contract for the full list of exclusions under this policy.)

6. Can I cancel my policy and how do I cancel it?
There is no cancellation provision under this policy.

7. What do I need to do if there are changes to my contact details?
It is important that you inform us of any changes to your contact details. This is to ensure that all the correspondence will reach you in a timely manner.

8. Where can I get further information?
Should you require additional information about our Contractor’s All Risks insurance or any other types of insurance products, you may contact ACPG directly at your convenience. Alternatively, you may visit our website at www.acpgconsultant.com.

Erection All Risks (EAR)

Similar to Contractors' All Risks, Erection All Risks is designed to provide comprehensive coverage for the installation and erection of engineering projects of electrical or mechanical equipments.

PRODUCT DISCLOSURE SHEET
ERECTION ALL RISKS INSURANCE
(Please read this Product Disclosure Sheet before you decide to take out a Erection All Risks Insurance Policy. Be
sure to also read the general terms and conditions stated in the policy).

1. What is this product about?
This policy provides All Risks coverage unless specifically excluded under the policy for contractors to meet their insurance obligations under the contract conditions for projects associated with the erection of machinery such as erection of power plants, turbines, transformers, etc.
This policy covers the erection work to be executed in accordance with the contract, any temporary works, construction materials, construction plant and equipment used at work site and any third party liability arising out of the performance of the contract.

2. What are the covers / benefits provided?
This policy has two sections, namely :
• Section I – Material Damage
It covers any unforeseen and sudden physical loss or damage from any cause, other than those specifically excluded under the policy:
a) to the contract work under erection
b) to the contractor’s plant, machinery and equipment used for the contract at work site
c) to Principal’s existing property
• Section II – Third Party Liability
It covers the contractor for all sums which he shall become legally liable to pay as damages consequent upon:
a) accidental bodily injury to or illness of third parties (whether fatal or not)
b) accidental loss of or damage to property belonging to third parties
occurring in direct connection with the erection of the items insured under Section I and happening on or in the immediate vicinity of the work site during the period of cover.
Duration of cover corresponds with the contract period including testing/commissioning period as stipulated in the Letter of Award. You need to purchase a new insurance policy to cover each project undertaken.

3. How much premium do I have to pay?
The total premium that you have to pay may vary depending on the Contract Value, the scope of work of the project to be executed, the risk exposure, the extensions to basic cover required and the underwriting
requirements of the company:
• Estimated Contract Value
• Rate Applicable _____________%
• Sum Insured for Extensions of cover
• Loadings Applicable to the Extensions _____________%
The estimated total premium that you have to pay is: RM___________

What are some of the key terms and conditions that I should be aware of?
Some of the key terms and conditions that you should be aware of are:
• Duty of disclosure - you must give all the facts in your application form fully and faithfully otherwise your policy may be void.

Duty of Assured – you shall take all reasonable precautions and comply with all reasonable recommendations of
the company to prevent loss, damage or liability and comply with statutory requirements and manufacturer’s recommendations.
• You must ensure that your sum insured stated in the Schedule are adequate:
a) Contract Works - full value of the erection works at the completion of the contract inclusive of freight, customs duties, dues and erection costs.
b) Construction Plant and Equipment - the replacement value of construction plant and equipment, which shall mean the cost of replacement of the insured items by new items of the same kind and capacity.
• Any extension of the contract period may be considered subject to advance notification to the company in writing and submission of relevant documents.
• Underinsurance - if the sum insured stated in the Schedule is less than the amount required to be insured at the time of loss, you are deemed to be self-insuring for the difference. The average condition shall apply in event of a claim.
• Excess - is the amount of loss that you have to bear in event of a claim.

4. What are the major exclusions under this policy?
This policy does not cover certain losses, such as:
a) loss or damage due to faulty design, defective material or casting, bad workmanship other than faults in erection.
b) wear and tear, corrosion, oxidation, incrustation
c) consequential loss of any kind or whatsoever including penalties, losses due to delay, lack of performance, loss of contract.
d) loss, damage or liability caused by or arising out of :
• war, riot, strike, civil commotion
• nuclear reaction, nuclear radiation or radioactive contamination
• willful act or willful negligence of the Assured or of his representatives
• cessation of work whether total or partial
(Note : This list is non-exhaustive. Please refer to the policy contract for the full list of exclusions under this policy.)

5. Can I cancel my policy and how do I cancel it?
There is no cancellation provision under this policy.

6. What do I need to do if there are changes to my contact details?
It is important that you inform us of any changes to your contact details. This is to ensure that all the
correspondence will reach you in a timely manner.

7. Where can I get further information?
Should you require additional information about our Erection All Risks insurance or any other types of insurance products, you may contact ACPG. Alternatively, you may visit our website at www,acpgconsultant.com.

Civil Engineering Completed Risks Insurance Malaysia

This Civil Engineering Completed Risks Insurance coverage policy provides cover for loss or damage to completed civil engineering properties or structures such as road, bridges, tunnel, dam and etc. Coverage is only granted for material damage to the structures insured and only repair costs are indefinable.

The Civil Engineering Completed Risks Insurance policy covers the following perils:

• fire, lightning, explosion, impact by land borne/water borne vehicles
• impact of aircraft, aerial devices
• earthquake, volcanism, tsunami
• storm
• flood, inundation, wave action, water
• subsidence, landslide, rock-slide
• frost, avalanche, ice
• vandalism

Duration of Civil Engineering Completed Risks Insurance cover is for one year. You need to renew your insurance policy annually.

Performance Bond Insurance

A Performance Bond is to ensure that contractors faithfully carry out the terms & conditions of a written contract. The amount of the bond will be recovered by the principal should the contractor fail to perform in accordance with the terms of the contract.

Contractors' All Risks / Erection All Risks Insurance

ACPG offers two types of engineering insurances for construction and erection works. Contractors' All Risks policy (CAR) is used to cover civil works whilst Erection All Risks (EAR) policy is used to cover mechanical and electrical works.

Scope of Cover

Both policies provide the most comprehensive insurance protection on an 'all-risks' basis that generally cover loss or damage due to fire, lightning, water damage, flood, storm/tempest, subsidence, landslide, cyclone, hurricane, earthquake, volcanic eruption, burglary and theft, explosion, spontaneous combustion, heating, fermentation, impact and aircraft damage.
In general, it is possible to extend the standard policy to cover strike, riot and civil commotion, inland transit, overtime, night work and express freight expenses, air-freight, cross liability, maintenance
visits /extended maintenance among others.
General policy exclusions are the deductibles stated in the schedule, consequential losses and liquidated damages, willful act or willful negligence of any official of the Insured, corrosion, non-observance of trade rules, war and terrorism risks, faulty design amongst others.

 

 

 

Comprehensive General Liability (CGI) Insurance Policy
Introduction :
The Comprehensive General Liability Insurance (CGL) coverage is usually purchased by contractors who undertake contract of works or services for mainly Oil and gas related industry and other industries such as Telecommunication, Power plants, Engineering, IT related etc. per the requirement in the respective contract if and when they are awarded with the contract.

Contractor must produce a CGL Policy to the principal before commencement of works.

Scope of Cover:
The CGL insurance Policy indemnifies the insured against his legal liability for property damage or bodily injury to a third party caused by an accident while carrying out the works which takes place in the coverage territory during the policy period.
CGL coverage is a very broad form and extensions can be granted under the coverage.
In addition, the policy will indemnify the insured for defense costs and expenses incurred in respect of a claim to which the policy applies.
The limit of indemnity is inclusive of defense cost and expenses incurred in respect of a claim to which the policy applies

Policy Form:
CGL Policy form is an occurrence policy form

Automatic Extensions:
• Contractual Liability
• Sudden and Accidental Pollution
• Damage to Principal’s Existing Property
• Excess Automobile Liability
• Cross Liability
• Waiver of subrogation

Additional Extensions as and when required for a Sub limit & for an additional Premium:
• Personal Injury Liability
• Product and Completed Operation

The information provided above is intended as a summary only. For full details of cover, conditions and exclusions please refer to ACPG Insurer Comprehensive General liability Insurance policy wording.

Please Download ACPG Company Profile here!!

Contractors All Risks Insurance Policy
This policy from ACPG General Insurance is designed specially for those companies who deal with construction jobs. Under this policy the company is insured against all the risks or damages that they may encounter right from the start of the project till its conclusion.

The terms of the policy are clearly stated in the document provided to the client and he is expected to agree to the terms before entering into the contract.

The policy secures the company against any unexpected and unfortunate accident or loss during the course of the construction work, excluding a few situations which are precisely mentioned in the policy document.

The policy protects the constructed object as well as the equipment used in the process. It is also valid for any temporary constructions that are made on the site in case the need arises. In addition there are various other benefits offered to the client which he may opt for at his discretion which is unique to ACPG General Insurance.

Erection All Risks policy can be opted for to secure the people and machinery involved in the erection of any structure.

This protects all these things from any damage or harm not only while at work but also if they are being stored or transferred to another place. It provides insurance for accident caused to an outsider as well if it is caused by the insured object.

The Advanced Loss of Profits policy offers insurance on the capital invested and provides returns for any loss incurred due to a delay or accident in the construction caused by an insured object.

Erection All Risks Insurance Policy

Malaysia

By ACPG Management Sdn Bhd (ACPG).

Erection All Risks Insurance
The policy covers all kinds of erection and testing on individual machine, industrial machinery, industrial plants, steel works and/or structure as well as third party property and/or bodily injury arising in connection with the erection work.

The cover may include Civil Engineering Works, Equipment for Erection, Removal of Debris, Professional Fees and Principal’s Existing Property.

Duration of cover corresponds with the contract period which is stipulated in the Letter of Award.

Loss Of Profit Following Machinery Breakdown Insurance
This policy is designed to provide coverage for loss of gross profit due to business interuption caused by an accident indefinable under Machinery Breakdown Insurance. The loss of gross profit is as a result of reduction in turnover due to decreased in production and increased in cost of working.

Boiler & Pressure Vessel Insurance
A boiler or pressure vessel stores substantial energy which on being released by explosion causes extensive damage and sometimes injury. Therefore protection is needed against serious consequence of a major boiler or pressure vessel explosion.

This policy provides coverage for Boiler or Pressure Vessel caused by and solely due to explosion of any boiler or pressure vessel insured whilst in the course of ordinary working.

Contractor's All Risks
This policy is designed to provide protection against loss or damage in respect of the contract works at contract site and third party claims arising in connection with the construction of a project.

With additional premium, the cover may include Construction Plant and Equipment, Construction Machinery, Removal of Debris, Professional Fees and Principal’s Existing Property.

Duration of cover corresponds with the contract period which is stipulated in the Letter of Award.

Contractors' Plant & Machinery Insurance
This policy provides coverage for the plant and machinery used by the contractors at the site for various projects. It provides protection against loss or damage from any cause not specifically excluded in a manner necessitating repair or replacement.

The sum insured should equal to the cost of replacement of the same kind and capacity via cost of replacement including freight, dues and customs duties plus cost of erection.

Deterioration of Stock In Cold Storage Insurance
This policy provides coverage against loss due to deterioration of stock in the cold-storage rooms following from material damage to the refrigeration plant which is indefinable under the Machinery Breakdown Insurance.

Electronic Shield Insurance
This policy provides protection against loss or damage to equipment which are electronically dominant.

The policy comprises 3 sections as follow:
SECTION 1 MATERIAL DAMAGE COVER
Cover all electronic equipment against all unforeseen and sudden physical loss or damage to the insured items which have not expressly excluded.

SECTION 2 DATA MEDIA COVER
Cover the Data Media such as disks and tapes external to the computer system due to material loss or damage which is indemnifiable under Section 1 of the policy.

SECTION 3 INCREASED COST OF WORKING
Provide indemnity for additional expenditure incurred for cost of hiring equipment following material loss or damage which is indefinable under Section 1 of the Policy.

Civil Engineering Completed Risks Insurance
This policy provides cover for loss or damage to completed civil engineering properties or structures such as road, bridges, tunnel, dam and etc. Coverage is only granted for material damage to the structures insured and only repair costs are indefinable.

The policy covers the following perils:

• fire, lightning, explosion, impact by land borne/water borne vehicles
• impact of aircraft, aerial devices
• earthquake, volcanism, tsunami
• storm
• flood, inundation, wave action, water
• subsidence, landslide, rockslide
• frost, avalanche, ice
• vandalism


Machinery Breakdown Insurance
This policy provides insurance cover for sudden and unforeseen physical damage or loss to the insured machine whilst either at work or rest and during cleaning, inspection, over-hauling or removal to another position within the premises. It covers all "accidental" damage or loss from any causes except those specifically excluded in the policy.

Storage Tank Insurance
Provides protection against sudden and unforeseen physical loss or damage to storage tanks caused by bursting, splitting, rupture or collapse. The policy can be extended to covers loss of contents contained in the storage tanks and must be directly resulting from any material damage to the storage tank which is indefinable.

Erection All Risk Insurance Policy
Under the Erection All Risk insurance policy of ACPG General Insurance the client is offered insurance against all the possible dangers he may have to face in the construction business. It covers the different risks involved in erecting structures, testing their strength and commissioning them.

The insurances offered under this plan include insurance of goods or articles being transported from one place to another by all means except air, customs duty, insurance of the equipment being used by the contractor on the insured site, storage risks of articles on site, liability towards a third party and expenses for the removal of debris.

The policy also covers the expenses in case testing operations take longer than was anticipated and if there are losses to the client due to delays or disturbances in the process of the business.

The advantages of the Erection All Risk insurance policy of ACPG General Insurance are plentiful no doubt but there are also a number of reasons the plan will not function for. In case of damages caused by war operations, intentional destruction of property, damages incurred due to the carelessness of workmen etc. the plan stands null.

In addition if the client is involved in legal issues or causes some damage to the surrounding area that is not insured then too the policy is not liable to pay the expenses.

The Erection All Risk insurance policy of ACPG General Insurance is an erection cum storage policy and so deals with the insurance of those things alone. The client is advised to read the terms carefully before signing the agreement.

 

 

 

 

Performance Bond Insurance Policy

(Insurance Guarantee) By ACPG.

Bond
Bond is an instrument to guarantee the performance of the Contractor in fulfilling the contractual obligations/ responsibilities as required by the Principal (in a construction or construction-related contract).

In the event of default of the said contractual obligations/ responsibilities by the Contractor, the Principal shall be entitled to demand the amount of the Bond and the Insurance Company shall pay the said amount guaranteed accordingly. The Insurance Company, in turn, shall recover the losses from the Contractor and the guarantors.

Bond can be issued either in the form of a Bank Guarantee or an Insurance Guarantee.

Tender Bond
This is required by a Contractor in connection with the submission of tender for a contract job to the Principal.

The purpose of the Bond is to guarantee the Contractor submits a bone-fide tender, stands by it, and is capable of providing a Performance Bond in the event the said Contractor's tender is accepted by the Principal.
Performance Bond
This is required in the event a Contractor's tender is accepted by the Principal and a Letter of Award is issued.

The purpose of the Bond is to guarantee the Contractor is able to fulfill the contractual obligations towards completion of the contract.
Advance Payment Bond
This is required in the event a Contractor is applying for an advance payment from the Principal to help funding the preliminary costs and mobilization works of the contract.

The purpose of the Bond is to guarantee the Contractor is able to make repayments for the advanced money. The mode of repayment is through deduction/recoupment from subsequent progress payments, the quantum of which is determined by the Principal.

This type of Bond is only applicable for Government contracts only.

BOND INSURANCE

Introduction
Bonds which may be required in almost every sphere of inter-personal and inter-corporation transactions are very wide in scope. Generally speaking, it is not a form of insurance business but because of the fact that insurance companies are financial institutions, their bonds are acceptable hence the involvement of insurance companies in bonding business, particularly those bonds which can generate other classes of insurance business for example bonds business which are secured together with other project insurance like the contractors’ Erection All Risk, Public Liability and Workmen’s Compensation insurance.
Under the PIAM’s bond underwriting guideline , the total bond business which an insurer can underwrite is limited to 5% of the total gross premium of the company based on the previous financial year ( not restricted to new business only but can include extension of existing contracts ie on total )
There are certain peculiar features in bond:-

A bond once given, cannot be cancelled before its expiry date

All bond issued to contractors for government projects are demand bonds and we worded in such a way that they can be invoked by holder of the bond without any reason and explanation. Insurer is obliged to pay upon demand notwithstanding any dispute or protest by the contractor or insurer or any third party.

Contract Guarantee / Bond Insurance
Bonds, which may be required in almost every sphere of inter-personal and inter-corporation transactions, are very wide in scope. Generally speaking, it is not a form of insurance business but because of the fact that insurance companies are financial institutions, their bonds are acceptable, hence the involvement of insurance companies in bonding business, particularly those bonds which can generate other classes of insurance business for example, bonds business which are secured together with other project insurances like the Contractors'/Erection All Risks, Public Liability and Workmen's Compensation insurance.

Under the PIAM Bond Underwriting Guidelines, the total bond business which an insurer can underwrite is limited to 5% of the total gross premium of the company based on the previous financial year (not restricted to new business only but can include extension of existing contracts, i.e. on total).

There are certain peculiar features in Bonds:

A bond once issued, is non-cancellable before its expiry date.
All bonds issued to contractors for government projects are demand bonds and are worded in such a way that they can be invoked by the holder of the bond without any reason and explanation. The Insurer is obliged to pay upon demand notwithstanding any dispute or protest by the contractor or insurer or any third party.

The most common types of bonds in use in connection with the construction industry are :

Bid or Tender Bond
Performance Bond
Advance Payment Bond (for government contract only)

Definitions

Types of bonds


Bid or Tender Bond

This is a guarantee required in connection with the submission of tenders for contract jobs with Public Authorities or Private Principals where relevant.

The bond value is usually a fixed amount determined by the Principal.

The main objective of this bond is to guarantee that the contractor who is awarded the contract will accept the Contract at the terms that was submitted by him to the principal. If he is unable to maintain his quotation, the Bond will be liquidated and the principal will request the surety to pay for the damages sustained up to the amount of the bond.

Performance Bond

This type of bond is usually required by the Principal to ensure that the Contractor fulfills his contractual obligations e.g. within the period specified or in accordance with the conditions of the contract.

The bond value is usually 5% of the contract value but this may vary.

If the Contractor does not complete the contract within the time specified and if no extension in the period is allowed, then the Bond or Guarantee is liquidated.

Advance Payment Bond (for Government Contract only)

This type of bond is only allowed for Government Contracts under the Persatuan Insurans Am Malaysia (PIAM) - General Insurance Association of Malaysia: Bond Underwriting Guidelines.

This is required when a Contractor applies for an advance payment from the Principal to help in the funding of the preliminary costs and mobilisation works of the contract.

The bond value ranges from 15% to 25% of the total contract value.

Foreign Workers Bond

This guarantee is required by the Immigration Department from an employer under Regulation 21 of the Immigration Regulations. It guarantees to pay the Director General of Immigration of Malaysian up to a maximum aggregate sum of the bond value, in the event that any of the foreign worker(s) is/are to be repatriated back to their home country in the course of their employment in Malaysia.

The duration of the bond and bond value for each foreign worker is fixed by the Immigration Department and it varies from country to country.

INSURANCE GUARANTEE (IG)

WHY INSURANCE GUARANTEE (IG)?

When the employer gets Kdn approval to employ an expatriate or artist to come into Malaysia to work for them, the employer needs to get Insurance Guarantee (IG) before immigration Department approves and issue a calling visa & work permit.

IG is one of the compulsory documents required by Immigration Department.

GUARANTEE AMOUNT REQUIRED

The amount of Guarantee is according to Nationality

SINGAPORIAN – RM200

THAILAND, COMBODIAN, – RM250

INDONESIAN,BANGLADESHI – RM500

PAKISTANI, INDIAN, MYANMAR, SRI LANKAN, PHILIPINE,- RM750

JAPANESE – RM1,000

KOREAN, BRITISH, FRANCE, CANADA, HONG KONG, CHINA, HAITIENNE – RM1500

RUSSIAN, USA, COLUMBIAN – RM2000

GUARANTEE PERIOD: FROM 13 MONTHS TO 26 MONTHSNormally, Immigration Department required 13 months duration of guarantee.
PROCESSING DURATION
We can cover and deliver the Bank Guarantee in *1 working day.
(*SUBJECT TO AVAILABILITY AND PLEASE REFER TO OUR PERSON IN CHARGE).
Minimum information require for insurance guarantee (IG)

Name of employer

Address of employer

Name of the expatriate

Passport number of the expatriate

Nationality of the expatriate

Place of Immigration

Bank guarantee duration that require.

Corporate Insurance

A comprehensive coverage that protects your business from the beginning. The following are some common coverages:

• Property Insurance
• Construction & Engineering Insurance
• Liabilities Insurance
• Group Employee Benefits Program

Contractor All Risk Malaysia

The Contractors All Risks Insurance offers comprehensive coverage for all types of civil construction risks. This policy covers physical loss or damage to property, as well as third party liability related to work conducted on the contract site.
Cover includes: The coverage for physical loss or damage to property is on an "All Risks" basis, i.e. the policy insures against damage to property in the course of construction by all sudden, accidental and unforeseen causes other than specified excluded perils and forms of damage. This cover includes works brought on to the site for the purposes of the contract as well as temporary works erected or constructed on-site. Additionally, the policy includes coverage for physical loss or damage to construction plant & machinery, equipment and tools used per the insured contract.
Third party liability: This policy also includes third party liability coverage. This insures against accidental bodily injury or illness to third parties as well as accidental loss of, or damage to property belonging to third parties, caused by an accident at the construction site. The policy also indemnifies for legal costs and expenses recovered by a claimant from the insured.

 

 

Malaysia Workmen’s Compensation Insurance

PRODUCT DISCLOSURE SHEET
WORKMEN’S COMPENSATION
(Please read this Product Disclosure Sheet before you decide to take out a Workmen’s Compensation Insurance Policy.

Be sure to also read the general terms and conditions stated in the policy).

1. What is this product about?
This policy covers you as an employer in respect of your statutory liability under the Workmen’s Compensation Act as well as at Common Law to your employees who are not covered by the Social Security Organisation (SOCSO) as provided for under the Employees Social Security Act 1969.
As an employer, you could be held liable due to:
• personal negligence
• failure to provide a safe place and a safe system of work
• failure to exercise reasonable care in recruitment of competent staff
• failure to provide proper machinery and maintain them in good working order

2. What are the covers / benefits provided?
This policy indemnifies you against all sums for which you shall be liable to pay compensation to your employees
• for personal injury sustained by accident or disease arising out of and in the course of his/her employment under
a) the Workmen’s Compensation Act 1952, and subsequent amendments to the Act, or
b) at Common Law
• In addition, all costs and expenses incurred with the written consent of the company in defending any claim for such compensation.
Duration of cover is One year. You need to renew your insurance policy annually.

3. How much premium do I have to pay?
The total premium that you have to pay may vary depending on the Estimated Annual Earnings declared, the Common Law Limit required, the nature of occupation of the employees insured and the underwriting
requirements of the company.

Common Law Limit
Estimated Annual Earnings
Rate Applicable _____________% on Estimated Annual Earnings
The estimated total premium that you have to pay is: RM___________

4. What are some of the key terms and conditions that I should be aware of?

Some of the key terms and conditions that you should be aware of are:
• Duty of disclosure - you must give all the facts in your application form fully and faithfully otherwise your policy may be void.
• Change in Risk - you must inform the company or your agent in writing on any material changes during the policy period so that the necessary amendments are endorsed into your policy.
• Duty of Assured - you shall take reasonable precautions to prevent accidents and disease and shall comply with all statutory obligations.
• You must maintain proper records of each employee and declare to the company their wages and earnings truthfully, otherwise in the event of a claim, the average condition in the policy shall apply.
• You shall not incur any expense or make any payment, settlement or arrangement in respect of any claim under this policy without the written authority/confirmation of the company.

5. What are the major exclusions under this policy?
This policy does not cover :
• any employee who is not a "workman” within the meaning of the Law(s)
• your liability to employees of Contractors.
• any injury by accident or disease sustained outside the Territorial Limit
• any liability assumed by agreement
• any injury by accident or disease attributable to war, nuclear weapons material, ionizing, radiations or
contamination by radioactivity from any nuclear fuel
• any liability of whatsoever nature attributable directly or indirectly to HIV (Human Immunodeficiency Virus) and/or any HIV related illness including AIDS and/or any mutant derivatives or variations thereat.
(Note : This list is non-exhaustive. Please refer to the policy contract for the full list of exclusions under this policy.)

6. Can I cancel my policy and how do I cancel it?
You may cancel your policy at anytime by giving written notice to our company in which case we shall retain the customary short period rate for the time the policy has been in force. Upon cancellation, you are entitled to a refund premium subject to the minimum premium to be retained by the company. No refund of premium will be allowed if there is a claim under the policy..

7. What do I need to do if there are changes to my contact details?
It is important that you inform us of any changes to your contact details. This is to ensure that all the
correspondence will reach you in a timely manner.

8. Where can I get further information?
Should you require additional information about our Workmen’s Compensation insurance or any other types of insurance products, you may contact us directly at your convenience. Alternatively, you may visit our website at www.acpgconsultant.com

Workmen’s Compensation Insurance Malaysia

This policy covers you as an employer in respect of your statutory liability under the Workmen’s Compensation Law(s) as well as at Common Law to your employees who are generally not covered by SOCSO.

This policy indemnifies you against all sums for which you shall be liable to pay compensation to any employee for personal injury sustained by accidents or occupational diseases arising out of and in the course of his employment under:

The Workmen’s Compensation Act 1952 and the subsequent amendments to the Act or
The Common Law. The standard Common Law limit is RM1,000,000 any one accident and in the aggregate

ACPG MANAGEMENT SDN BHD

www.acpgconsultant.com

We (ACPG), provided all classes of insurance services more than 23 years in Malaysia (since year 1989).

We (ACPG) One of The Largest General Insurance (Individual & Commercial Insurance) Solution Service Provider in Malaysia.

Any enquiry, email to enquiry@acpgconsultant.com or Call our Careline : +603-9286 3323.

Please Download ACPG Company Profile here!!

Please ACPG Corporate Video for Malaysia Commercial Insurance (Business Insurance) and Malaysia Individual Insurance (Personal Insurance).

For ACPG Corporate Video posted on YouTube

at http://youtu.be/hwWKPU003gE for Malaysia Commercial Insurance (Business Insurance) and

at http://youtu.be/0hN64xcYgrI for Malaysia Individual Insurance (Personal Insurance).