The Importance of having Building Insurance
Insurance is a form of periodic remittance of monies to an authorized establishment for compensation in case of an unseen eventuality. It is designed to protect the liquidity of a person, property (like in this case – building) or investment. Therefore, building insurance helps to protect the value of the building, in case of any natural or human calamities.
A good building insurance covers new construction, renovations, remodeling and installations. Construction being a technical activity that needs constant observation, the premiums purchased should cover every phase in the lifespan of the building.
Buildings, be it commercial or residential, are the few value-appreciating commodities due to its intrinsic value. Its construction involves long-term commitments in resources, time and labor. This makes it essential to take an insurance to safeguard it against any of the following eventualities;-
1. The ground the building is built on may succumb due to natural causes. Earthquakes, storms, and strong wind may shake the foundation. The type of soil, its texture and composition may not be strong enough to withstand nature. Some buildings might take long, but they eventually give in to these forces of nature.
2. The materials used to construct might not be of the recommended quality. Although this might be a legal encounter that can go either way, the investor’s interest can be safeguarded if he has this insurance.
3. Building construction is majorly based on arithmetical estimations. Skyscrapers and other extreme architectural designs are based on human calculations. Without mentioning the amount of money involved, there is the danger of miscalculations which might render the investment a waste. Building insurance helps oversee this.
With the unexpected failure, there are direct casualties as a result. Ranging from deaths, incapacitation, fires, destruction of nearby properties, the adverse effects on a collapsed building are far-reaching. Though not typical, the element of insurance (accident) has to be adopted.
Planning for a Good Building Insurance
A good building insurer must have the following characteristics;-
1. Must be specialized in buildings and other construction products. This brings in experience and advice when undertaking the project.
2. The insurer must have a sound financial base. This would show confidence in liquidity if the worse were to happen.
3. The premiums provision in case of a fatality ranges from one insurer to the other. Some elements, for instance, life lost or machine destroyed are insured separately. A reasonable premium would be the one that covers most of the eventualities on a moderate budget.
Claiming compensation is a complicated legal task which needs proof. It is based on the assumption that there was no intent omission. Therefore to safeguard the investment, precautionary measures should be undertaken during the construction period to avoid backlash when the worst happens. The following should be observed in this case;-
1. Pay the insurance in good time.
2. Follow the construction guidelines; measurements, architecture, drainage, depth, and mixtures.
3. In case of a fatality;-
o Seal off the area to avoid tampering with the evidence.
o Value/estimate the loss of resource, workforce, and machinery.
o Align the information needed as stipulated in the insurance guidebook.