22 Aug Understanding Earthworks Advantage Insurance

Posted at 00:07h in News by

Understanding Earthworks Advantage Insurance

With standard Construction Insurance, there are certain events related to earthworks that would be excluded under your policy. For example, because rain may be considered an ‘expected’ event (if normal for the area and time of year) you may not be covered from damage caused by rain. You also wouldn’t be covered for the result of defective design, as the policy assumes you would be able to recover costs from another policy (for example your architect or engineer’s insurance policy).

Rain and defective design have the potential to cause problems with your earthworks projects, and the costs of stabilising the affected area, replacing dislodged material, and even reducing moisture in stockpiled material can quickly mount up. Earthworks Advantage Insurance can provide certainty of cover during earthworks and excavations, covering landslip, subsidence, collapse or displacement events.

Fast Facts

On average 80% of all building construction involves some form of bulk earthworks. Most earthworks collapse-related claims involve issues surrounding the design and/or weather influence.

Case Studies

Here’s an example of what Earthworks Advantage Insurance would cover:

Construction business owner Peter engaged an engineer to design a basement level excavation. The design presumed the geology could support near vertical sides to the excavation without needing any retention. But after rain, that was normal for that time of the year in that area, one side of the near-complete excavation collapsed almost along its entire length.

To rectify the situation, the excavation was temporarily stabilised using gravel to refill the excavation, then ‘bored and poured’ piling was installed in the area of collapse. Afterwards, the gravel was re-excavated. Stockpiled soil that was intended for back-filling then had to be dried before it could be used.

As a result, Peter was left with $585,000 in additional costs. After the special excess of $25,000 was paid, Peter’s Earthworks Advantage Insurance covered the costs of:

  • gravel infill ($100,000 to supply and remove)
  • retention piles ($450,000)
  • soil drying operations ($10,000)
  • consultant’s fees and extra plant hire costs ($25,000)

 

What’s Covered – And What’s Not?
The cost of reducing moisture in stockpiled material caused by the weather.
Increased salaried staff costs
If you’re underway with construction works and weather or defective design results in earth movement such as landslip, subsidence, collapse or displacement, the cost of:
Claims where you were responsible for the earthworks design

1. replacing insured material
2. constructing a support and retention system
3. temporarily stabilising the area and removing it when required

Loss or damage you are not contractually liable to remediate
Increased costs of working
Claim amounts in excess of $50,000 or 10% of the project’s value

 

Policy Details

The policy wording spells out the details, but these are the main things relating to a claim.

TYPE OF COVER
POTENTIAL BENEFITS

 

Maximum indemnity
You’re covered for costs up to $1 million, or 25% of the project value (whichever is less)

 

Special deductible (excess)
Unless a higher excess amount already applies to your standard Construction Insurance, there’s a special excess of $25,000 that you need to pay towards any Earthworks Insurance claim

 

Increase in cost of working
You’re covered for additional or unbudgeted equipment hire, labour or machine operation costs, consultants’ fees and the like, up to a total of $50,000 or 10% of the project value (whichever is less)

 

Drying saturated soil
You’re covered for drying saturated soil up to a total of $10,000

 

Responsibilities
You must be contractually liable for the cost of remediating the loss or damage addressed in the endorsement

 

Earthworks Advantage Insurance is extra cover that can protect you from the cost of remediating earthworks subsidence, collapse or displacement, caused by the weather and/or defective design.

You can add it as an optional extra to your Single or Annual Construction Insurance. For a quote on a more comprehensive Earthworks Advantage Insurance policy with higher limits and more features, talk to CRM Brokers today on 1300 880 494.

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