01-32_GENERALS_SUMMER25_PT - Flipbook - Page 26
ENGAGEMENT
language embedded in the broad form
property requirements to re昀氀ect the
insuring agreement of that policy.
When it comes to wrap-up liability
insurance, unless canceled, the policy
typically remains in e昀昀ect for the duration stated on the declarations and can
be extended as necessary. However, once
construction is complete, that is when the
clock starts ticking on the given completed operations period within the policy.
Often the completed operations period
allowance is 24 months for issues related
to construction activity. It’s important to
distinguish whether an issue stems from
construction activity or the use of the
facility for its intended purpose; the latter
would require the claim to be 昀椀led against
the owner’s general liability policy.
Best practices for the handoff process
Irrespective of the contract type or
TEMPORARY GUARDRAIL SYSTEM
speci昀椀c considerations outlined in the
builder’s risk policy, it is important to
establish an internal protocol for the
property insurance hando昀昀 process.
Clearly indicate when the project is
expected to be substantially complete,
which means that construction coverage
will lapse and the owner needs to have
property coverage in place.
The contractor should obtain
written con昀椀rmation from the owner
that property insurance coverage is in
place, and specifying the e昀昀ective date
of coverage. If the contractor placed
builders’ risk coverage, they can lapse
the policy on the same date the owner’s
policy begins. This date can also be
amended through supplementary
conditions, underscoring the importance
of double-checking all contracts.
In the event the project insurance
was placed by the owner, the contractor
should clearly communicate to the owner
that they are no longer responsible for
risk at the site.
Deficiency work
OSHA & OH&S Compliant
Flat Surface Application
Built of Powder-Coated Steel
Stair Rail and Handrail Applications
Quick Install
Other ideal uses include: placement in
front of windows, elevators, or used as
any type of railing
Cost Effective
753 Evett Street
Sarnia, ON N7S 5N3
P:(519) 336-5353
F:(519) 332-6994
sales@buildergear.com
www.buildergear.com
26 the generals • SUMMER 2025
Once the property has been turned over
to the owner, and the insurance handoff
process is complete, the contractor may
still need to perform deficiency work.
Note, however, that the builder’s risk
policy is typically no longer in force by
this point in time. Once the building is
turned over to the owner, it becomes a
third-party property for the contractor.
Any damages to the completed works must
be claimed under general liability policies.
If the damage is caused by or connected to
previous construction activity, and occurs
during the completed operations period of
the wrap-up liability coverage, this policy
may respond. The reason is that once the
building is turned over to the owner, it
becomes a third-party property from the
standpoint of the contractor. To that end,
the owner’s property insurances may also
take precedence in the event of a loss.
As contractors finish a job, they
are eager to get paid. As a result, the
important handoff process is often
overlooked despite its contractual
implications. It is critical for contractors
to check the contract language to better
understand when coverage ends and take
the necessary steps to remain compliant
with contractual obligations.
For details about Marsh’s specialized
construction insurance services, please
visit the Marsh construction page.
THEGENERALS.NET
