2. A construction company has a $100 million contract to construct a major indus
ID: 1712205 • Letter: 2
Question
2. A construction company has a $100 million contract to construct a major industrial plant. What types of insurance policies should the construction company purchase to cover its risks on the project? 3. A construction company has a $300 million contract for the construction of a power plant that will burn natural gas. As a part of its risk management strategy, the construction company has decided to require surety bonds from selected material suppliers and subcon- tractors. From which suppliers and subcontractors should the construction company require bonds, and what type of bonds should it require?Explanation / Answer
2. The following types of insurance that are required for a construction company.
a) Insurance for public liability
b) Insurance against employers liability
c) Professional indemnity insurance
d) Insurance for the structures and the works those are carried or carrying out.
e) Insurance against the non-negligent withdrawal of support.
3) Bonds are generally surety for a particular project work that should be done within stipulated time non compromising with the quality. Types of bonds are Bid bonds performance bonds, payment bonds, construction bond eligibility. Bid bonds are to protect the project owner and he has the right issue surety and to enforce the bond and can change if any additional costs are added. Performance bond itself indicates the right track of the project that is running and it provides the surety about the terms and specifications and about the principle defaults etc. Payment bond indicates the payment to the respective salaries to the employees by the contractors and the subcontractors in time otherwise the project gets delayed. Construction bond eligibility describes the ability of the contractor to perform a particular project and number of projects handled in time and the failures and the efficiency of the contractors' machinery and resources available to the contractor to perform this work.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.