Contract works and documentation of nearby buildings

A contract works insurance survey is primarily intended for contractors and real estate developers; It presents the Project and the associated risks to the insurance company. According to the risks, the underwriters in the insurance company compile the required policy and coverages. The survey includes information about the Insured and relevant officials, a detailed description of the Project and its execution stages, reference to required Standards and Procedures, characterization of the expected safety procedures on the Site, as well as risk management, including risk-mitigation measures. A documentation survey of neighboring buildings is required if insuring the risks of Vibration, Weakening, and Removal of Support (VWRS) (for example, in the case of damage to the foundations of a building, as in the case of damage to building foundations due to excavation works).

In the building documentation survey, we will carry out external documentation of buildings that border the first line to the construction site, and sometimes also in the second circle, in order to document the state of the existing failures, such as cracks in the shell, local subsidence, and more. The documentation is carried out in public areas and on the outer shell of the building, without entering the residential units or infringing on the privacy of the residents.

Mechanical Breakdown and Electronic Equipment

A survey for mechanical breakdown insurance is intended to insure electro-mechanical equipment in case of unexpected accidental damage, and the policy is also used as a basis for a Loss of Profits policy as a result of a mechanical breakdown incident. On the one hand, they insure typical systems such as pumps, compressors, air-conditioning systems and refrigeration systems, generators and transformers, and elevators and escalators. On the other hand, industrial systems such as printing presses, production lines in factories, processing machines (CNC), turbines and water desalination facilities, etc. In the survey for mechanical breakdown insurance, the insurance company asks for an Engineer’s opinion, and this is where we come into the picture. First of all, a list of all relevant equipment is made, including data such as the year of manufacture and the characterization of the equipment (manufacturer data, suppliers, production outputs, etc.), and then an initial filter is performed according to the age of the equipment. According to the conclusions of the report, the policy is compiled.

A survey for electronic equipment insurance is similar in essence to mechanical breakdown insurance, but is designed to insure electronic equipment such as servers and computers, command and control systems, software and plug-ins, communication exchanges, and more. The policy covers damage to equipment (hardware and software), damage to external storage servers, as well as data recovery expenses and operational expenses until a return to regular activity.

Fire, Burglary, and Liability Protections

Protection surveys for property insurance are ordered mainly by the insurance company, which wants to know the state of the requested business for the purposes of fire, burglary, and liability insurance. The main purpose of the protections survey is to help the appropriate underwriter at the insurance company in the decision-making process, that is, whether to accept the proposed business for insurance at all, and if so, under what conditions. The survey details, among other things, the existing protection measures (hence its name, "protections survey") in the complexes intended for insurance. In our case it is mainly manufacturing factories, office towers, and logistics centers. In the section on fire risks, we will refer to whether there is equipment for emergency use, such as water sprinklers and fire stations, fire detection and extinguishing systems, and other equipment, whether an adequate testing routine is carried out (for the emergency systems and other service systems), and whether there are special risk centers, for example chemical storage, high-heat production processes, etc. In the burglary risks section, we will refer to sensitive equipment and the security circuits of the complexes. In the liability section we will analyze the environmental impact in the event of a fire, and we will also refer to the work routines and safety procedures of the complexes in subject. Finally, we will provide relevant guidelines for underwriting, as well as a summary of recommendations and highlights for the Insured, including required improvements.

Spoilage of Goods and Loss of Profits

Merchandise spoilage and profit loss surveys are mainly intended for businesses that have products that need to be stored in a controlled environment where they maintain a certain temperature and/or humidity. For example, industrial complexes for the production of chemicals and pharmaceuticals, or storage and processing complexes for food products, such as sorting and distribution centers for agricultural goods, manufacturers and distributors of chocolates and ice creams, meat and fish processors, and more. For example, in a fruit and vegetable sorting and packaging plant, the purpose of merchandise spoilage insurance is to cover damage caused to agricultural produce held in refrigeration/other controlled environment due to damage to the refrigeration equipment of the cold rooms, or failure of the control system that should detect a change in the desired storage conditions in the storage rooms. In a survey of these types of complexes, we will present to the insurance company the storage procedures and the maintenance routine of the service systems that are used for the site’s activity, we will review the specifications of the command and control system, the operation and supervision procedures for the stored goods, and the existing backup measures (generators, refrigerated trucks to which boxes can be moved, alternative storage complexes close to them to relocate goods, etc.). To be noted, this coverage will usually be conditioned on drawing up a mechanical breakdown insurance policy for the relevant service systems or production systems.

Set Up and Trial-Run

Installation and trial-run surveys are intended for activities such as assembly and transfer of production lines, dismantling and transferring of equipment and machinery in factories, construction of power plants, desalination plants, clean rooms, and more. They are similar in essence to surveys for the insurance of contract works, and include a longer running period, coverage for the risks of mechanical breakdown and electrical damage arising from the installation activities, and reference to the risks of loss of profits due to a loss caused by the postponement of the production activity due to damage during the trial-run period. In the survey we will refer to the disassembly, assembly, and transportation of the machines, including connection to ancillary service systems. We will describe the working environment and the storage of the equipment before the initial assembly and operation, we will detail the experience of the contractors and the professionals who accompany the works, until the end of the initial operation and the end of the trial-run period of the installed systems, and we will also emphasize the activity of importing equipment from abroad and transporting the property to the installation site. In addition, we will make sure that the construction and start-up activities are carried out in an orderly and professional manner by an experienced and dedicated team that has carried out similar projects, under close supervision and management. As required in this type of activity, the initial start-up and the start-up period will be carried out in the presence of the Operations Manager and the representatives of the manufacturers who are experienced operators. This way the insurance company can know that the setting up and running activity is done in a correct method, and that the teams involved have the appropriate knowledge and experience needed in this activity.

Valuation and Appraisal

Valuation and appraisal surveys are intended in the insurance industry to determine the value of the insured structure or contents. On the one hand, in order to make sure that the insurance amounts do not reflect a situation of insufficient insurance, which is a situation where the contents are insured at a value lower than its new value (in established values), then in the event of damage, the calculation will be reduced according to the amount of the difference. And on the other hand, to make sure that the Insured are not in a situation of over-insurance, where the contents are valued at a higher value, which affects the amount of the premium that the Insured will pay. And, in case of damage, the insurance company will pay according to the current value of the equipment and not according to the too high value. In the financial sector, surveys are intended for obtaining collateral such as guarantees and bank loans. In these cases, it is required to present to the financing entity an Engineering Appraisal that determines the value of the machines at their initial value (as new), market value, or value for quick realization. The survey describes the insured machine, including details of the manufacturer, year of manufacture, description of suppliers and outputs, and examines the nature of the machine’s activity (whether it works at full production output, whether a maintenance routine is carried out, etc.), and accordingly the value of the machine is estimated.

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