Insurance and Risk Management in Construction

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Deals with preface of risk management, coverage and applicability of insurance, Liability Insurance, Employer Liability Policy and Insurance provisions under FIDIC.

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Insurance and Risk Management in Construction

  1. 1. Insurance and Risk Management Sarbesh Mishra, PhD Sr. Associate Professor NICMAR, Hyderabad. Dr Sarbesh Mishra 1
  2. 2. About Myself Name : Dr Sarbesh Mishra Qualifications 1. 2. 3. 4. B.Com (Hons) Post-graduate in Commerce M.Phil in Commerce Ph.D. (Commerce) Experience : Joined University of Delhi, as a Lecturer in Commerce in 2001 and continued till 2005 and then joined Army Institute of Management, NOIDA as Senior Faculty, Finance prior to current appointment at NICMAR since 2007. Dr Sarbesh Mishra 2
  3. 3. Publications 1. Book titled “Working Capital Management” is in circulation since 2007 & approved text book in IMT, Ghaziabad & MDU, Rohtak Management Syllabus. 2. Book titled “Insurance & Risk Management” was launched in Oct, 2013. It has been adopted by Manipal University and SMU DMS. Both the books have been published by Vikas Publishing House, NOIDA. Dr Sarbesh Mishra 3
  4. 4. Related to Insurance (Thoughts) • Fun is like life insurance; the older you get, the more it cost. Kin Hubbard • One of the major goals of health insurance reform is to bring down the cost. Valerie Jarrett • The availability of private insurance provides tremendous insulation for millions of individuals. Lawrence Summers Dr Sarbesh Mishra 4
  5. 5. Functions of Insurance Risk Sharing and Risk Transfer: • Shifting or transferring of risk from one person to a group • Sharing losses, on some equitable base, by all the group members Dr Sarbesh Mishra 5
  6. 6. Methodology 1. Risk Reduction through Pooling 2. Theory of Probability and Law of Large Numbers Dr Sarbesh Mishra 6
  7. 7. Role of Insurance in Managing Risk Financing Applicability of Coverage 1. 2. 3. 4. 5. 6. 7. Real and Personal Property Machinery Crime Coverage Extra Expense and Valuable Papers Worker’s Compensation Comprehensive General Liability Automobile Liability & Physical Damage Dr Sarbesh Mishra 7
  8. 8. Health Insurance • Individual / Group / Deferred / Overseas Mediclaim Policy • Domiciliary Hospitalization • Maternity Benefits • Exclusions / Pre-existing Illness Qualifying Age Limit – Baby of 01 Day old to 70 Years. Dr Sarbesh Mishra 8
  9. 9. Liability Insurance 1. Product Liability Policy – Products are sold to their users/consumers, if defective, may cause death, injury, illness or property damage. Manufacturers of such product are liable to pay relief to accidental victims Coverage – Manufacturers / Marketers 2. Professional Indemnity Policy – Extends protection to professionals such as Doctors, Solicitors, CA, Architects. (ii) No legal liability to pay damages arising out of negligence in the performance of their professional duties. 3. Directors’ and Officers’ Liability Policy – This policy is designed to provide protection to directors and officers against their personal civil liability as the Directors hold the position of trust and responsibility Dr Sarbesh Mishra 9
  10. 10. Employer’s Liability Policy It’s otherwise referred as Workmen’s compensation Insurance. • Offers protection to Employers against their legal liability for payment of compensation in case of death or disablement of employees arising out of and in the course of employment. • Table A – Covers those who come within the definition of “Workmen”. • Table B – Covers those who are not “Workmen” Dr Sarbesh Mishra 10
  11. 11. Insurance Provision Under FIDIC 19.1 – General Requirements by Contractor 19.2 – Insurance by contractor during Design-Build Period 19.3 – Insurances to be provided by Contractor during the operation service period. Dr Sarbesh Mishra 11
  12. 12. THANK YOU Dr Sarbesh Mishra 12

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