Construction insurance

Construction insurance

Basic coverage:

Any work or installation that forms part of the work will be covered against direct accidental and unforeseeable material damage that is not excluded. This includes:

• Natural risks, such as wind, floods, earthquakes, landslides, etc.
• Fire, lightning and explosions.
• Robbery.
• Damages as a result of errors in design, execution or defects in materials.
• Vandalism.
• Damage from outside, such as a crane falling or vehicles colliding.
• Breaks in external drains that cause damage to the work.

Optional additional cover:

• Maintenance or storage cover
  

  If the work contract includes a period of maintenance in the work performed for carrying out necessary repair or adjustments, you can opt for this extension of the insurance, which covers damage caused by the contractor while performing the work.

  This cover can be extended to damage to the construction caused during execution that manifest later during the maintenance period.

• Construction machinery and equipment
  

  Damage due to the same causes that might affect the construction itself, machinery such as cranes, diggers, concrete mixers, loaders, etc., and equipment such as scaffolding, pumps, forklifts, water tanks, cement silos, etc.

• Expenses for debris removal and demolition
  

  Expenses as required for demolishing and removing rubble and debris from the site caused by an incident covered by the policy.

• Additional expenses for overtime

  A loss can cause a delay in construction work. This cover includes any extra costs due to employing workers outside their normal hours to undertake the work of repairing the damage caused by a covered incident, in order to avoid delay and complete the work on schedule.

• Adjacent assets
  

  The policy covers pre-existing or adjacent assets or properties in which the insured work is carried out (renovations, extensions, refurbishments or rehabilitations), provided that they are owned or are under the custody of the insured contractor. For the incident to be compensable, it must be caused by the execution of the insured construction work.

• Civil liability
  

  Civil liability covers the payment of compensation for which the insured may be liable to third parties, for bodily or material damage that may be involuntarily caused by the execution of the insured work.

  Legal costs and financing are also included. This cover may be extended by including what is called cross liability, in which each of the companies involved in the work is considered insured, as if they had taken out separate insurance. Employers' civil liability can also be taken out to cover the payment of compensation for damages or injury to site personnel included on the payroll due to work accidents.

Building damage insurance

Basic coverage:

• Cover against structural damage.
• Cover for additional costs for demolition and clearing of debris.

Optional additional cover:

• Mechanical resistance and stability of non-load-bearing façades.
• Waterproofing of roofs.
• Façade waterproofing.
• Watertightness of basements.
• Pre-existing assets.

Policyholder

Construction insurance can only be taken out by Bankinter customers.

Economic terms and conditions

Neither insurance policy admits part payment of the premiums, although the insurance for building damage can be paid as follows:

Between 25% and 30% at the time the policy is issued.

The remainder upon entry into force of the cover (completion of the work) along with any adjustment of premiums if the initial insured sum has changed, which happens in most cases.

In any case, the premium must be paid before receipt, i.e. on the date the risk is covered, and the supplement for entry into force of the cover must not be delivered if the premium has not been paid in full.

Requirements

For construction insurance, the policyholder will need to complete the corresponding request for information, although the insurance company may request additional information on the work to be built: construction report, geotechnical report, material execution budget, etc.

The taking out of insurance for damage to the building is subject to the performance of a technical test (which includes control of the project, execution and materials) from the date of commencement of the work, which must be performed by a technical control body that is independent of all participants in the building process, previously accepted by the insurance company and that must be contracted by the policyholder.

Territorial scope

The policy cover can only insure works located in Spain.

Temporal scope

• Construction insurance

  The period covered by this policy is the entire construction period and it may be extended for an additional 12 months through maintenance cover.

  It also provides for the possibility of extending the initial duration of the works and that extension will follow the terms and conditions set out in the policy.

• Building damage

  10 years of cover from the date of entry into force (date receipt of the delivery of the works is signed for).

What works can be insured under Construction Insurance?

All types of works in the construction phase can be insured. These are:

• Building works
  • Homes.
  • Shopping centres, hotels and offices.
  • Schools and hospitals.
  • Auditoriums, warehouses, etc.
• Civil engineering
  • Roads and highways.
  • Housing estates or residential complexes.
  • Bridges and tunnels.
  • Maritime building, dikes, dams, etc.
  • Railway works.
  • Structures, piping, etc.
• New sites and renovations, extensions, refurbishments or rehabilitations of pre-existing assets

Why is fully-comprehensive construction insurance necessary?

There are many risks that arise during the execution of any work. These random risks can lead to damages whose repair affects the planned execution of the work, as regards both budget and scheduling. A delay in the completion date may also, of course, have a financial impact.

What does the fully-comprehensive construction insurance policy cover?

Damage to the work itself produced by:

• Natural risks

  Storms, hurricanes, cyclones, earthquakes, floods and other extraordinary natural phenomena.

• Conventional risks

  Fire or explosion, lightning strike, malicious acts by third parties or by site personnel, vehicle collisions, external mechanical actions, falling cranes or breaks in external drains that cause damage to the site.

• Risks inherent to the execution of the work

  Damages caused as a result of design errors, execution defects or material defects.

• Robbery
• Overtime, night work and holidays
• Strikes, riots, civil unrest, terrorism and acts of vandalism
• Expenses for debris removal and demolition
• Pre-existing or adjacent assets to the work;
• Damage to construction machinery
• Damage to construction equipment

What do I do if I want to submit a claim?

If you need to submit a claim, call Mapfre Spain customer service on 91 836 53 65 (lines are open 24 hours).

What does construction machinery damage insurance cover?

It covers external damage caused by:

• Fire, lightning or explosions.
• External mechanical actions and falling solid objects.
• Accidents resulting from the use of defective material or defects in workmanship.
• Force majeure events such as storms, hurricanes, earthquakes, floods and other natural phenomena.

What does the maintenance insurance cover?

This covers the following damage for the twelve months following completion of the work:

• Damages caused to the work accidentally when the contractor carries out work that are contractually bound to complete, during the maintenance period.
• Damages caused to the work by a hidden defect or flaw that is caused during the construction period, provided that it has not been previously discovered.

Under no circumstances are damages or losses due to a fire or explosion covered during this period.

Any damage or loss caused by defects in watertightness and/or waterproofing of roofs, façades or basements during this period is also excluded.

What is the scope of the construction liability cover?

The cover is very broad and covers different circumstances:

• Extra-contractual civil liability

  It covers the payment of compensation for which the insured may be civilly liable, for bodily or material damage or injury caused involuntarily to third parties by the insured work and directly related to its execution.

• Cross liability

  It extends the benefits of the previous cover to each of the insured parties involved in the execution of the work (contractor and subcontractors) as if each of them had separate cover.

• Employers' civil liability

  It covers damages or injury to site personnel included on the payroll due to work accidents.

• Legal defence for the insured party

  It includes expenses, court costs and the posting of bail.

Is the 10-year building warranty compulsory?

Since the enactment of the Spanish Building Act 38/1999, of 5 November, the 10-year building warranty is mandatory for any building for residential use. But, even though it is not compulsory, we can also insure buildings for other uses.

This insurance for damage to the building is intended to protect owners, developers and purchasers of buildings or a part of them, from the date the work is delivered, against material damage incurred due to certain construction defects or flaws.

What does the 10-year building warranty cover?

In addition to mandatory legal cover, the company offers you other cover designed for better and greater protection:

Basic Cover

• Cover against structural damage

  Compensation for or repair of material damage caused to the insured building due to defects or flaws that originate in or affect the foundations, supports, beams, ironwork, load-bearing walls or other structural elements and directly compromise the building's stability or mechanical resistance.

  Cover for the costs of repair and reinforcement incurred in order to eliminate the threat of the building's basic structure collapsing and for the costs of removing and demolishing debris derived from a covered incident.

Extended Cover

• Mechanical resistance and stability of non-load-bearing façades.

  Cover for the repair of damages that affect their mechanical resistance and stability.

• Roof waterproofing

  This cover includes compensation of the costs of repairing or replacing the components that guarantee roofs are waterproof.

• Façade waterproofing

  Compensation of the costs of repairing or replacing the components that guarantee façades are waterproof.

• Watertightness of basements

  Compensation of the costs of repairing or replacing the components that guarantee watertightness. Only provided in certain cases, depending on the technical characteristics of the risk.

• Pre-existing assets

  Cover is provided for damage to the building being renovated, rehabilitated or refurbished. This cover may be taken out depending on the work being done and the state of the pre-existing work.