A proper interval is maintained between the collection of successive installments.The calculation of these installments is as follows: When the period of insurance exceeds twelve months, the premium is collected in installments. So, for deciding the premium rates, the insurers carefully scrutinize:Ĭhoosing a construction all-risk insurance plan with a high deductible will lower the monthly premium payments, and similarly, having a plan with a low deductible will increase the monthly premium amount. Exposure of the construction site to various conditions.Read More: What are the general exclusions under construction all risk insurance?įollowing factors are considered for risk assessment: So, submitting appropriate and accurate information to the insurers will lead to a fairer amount of the premium. Risk assessment is an important activity carried out by the insurers while determining the premium. The project period also plays a major role and it starts from the time of unloading the first batch of material on the site and ends when the project is fully completed. Also, the sum insured should denote the complete value of the contract work including the value of the material supplied, cost of cleaning debris, expected escalation of the contract, etc. The sum insured plays a major role in calculating the premium amount. Therefore, the factors contributing to the premium calculation are: In addition, the basis of calculating the premium depends on the nature of the project and the period of the contract.
In the construction’s all-risk insurance policy, the insurers consider the peculiarities of each individual project.
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So, we must know how to calculate the premium in construction all-risk policy. This amount is paid periodically by the insured to his insurer. However, for undertaking this risk, the insurer charges an amount which is called the premium. In any insurance, the risk is transferred from the insured to the insurer.
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