The estimate of the Financial Costs of a Budget includes the Cost of Insurance and the Financial Cost itself, which comprises the set of disbursements in terms of monetary units for interest, commissions and other expenses arising from obtaining loans from Financial entities.
The Financial Cost Analysis is developed in the next Post. This Post is about types of Insurance and their Cost.
Policy.The Policy is the document that gives validity to the Insurance contract agreed between the Insured and the Insurer. This contract specifies the requirements, rights and obligations of the parties involved.
Coverage. Insurance Coverage is the commitment assumed by the Insurer to pay compensation to the insured (or their beneficiaries), with the aim of repairing the consequences of a loss. It should be pointed out that the cover has a limit known as the insured capital.
Premium. The Premium is the amount of money the Insurer charges for the Insurance. The Premium guarantees that the Insurer is obliged to comply with the benefits it has promised to the Policyholder.
Types of Insurance | Calculate Man Hours
The Bidding Documents establish the types of Insurance required, the scope of its Coverage and the Insured Capital.
Generally it is requested that the Insurance Policies have the following clauses inserted:
1. Clause of renunciation of the Insurer to the subrogation against the Client. (Known as non-repetition clause)
2. Clauses that prevent the Insurer from modifying and/or cancelling the Insurance without prior notification to the Client.
The Client is responsible for monitoring the validity of each Policy and compliance with the requirements of the Bidding Documents.
List of insurances that are usually required by the Bidding Documents:
Before the adjudication.
Insurance for maintenance guarantee of the Offer.
The bid maintenance guarantee is returned to the bidder whose proposal was not accepted. The return is made after the adjudication of the work to the successful bidder. The costs of these policies, as indicated in the post Overheads, are charged to General Expenses.
After the Adjudication.
Workplace accident insurance.
An Accident of Work is an unexpected event occurred in the work or in the trip between the domicile of the worker and the place of work or vice versa (in itinerary). These Insurances are charged at the cost of the man-hour.
Worker’s life Insurance.
It is a special social benefit paid by the employer that was created to cover the risk of death of workers whatever the cause that produces it.
Professional Civil Liability Insurance.
Cover damages to the Client that involuntarily, due to his errors or omissions, the professional may have caused him in the exercise of his profession.
Caution Insurance for guarantee of fulfillment of the Contract.
Surety Insurance to replace retention with Repairs Funds.
The surety Insurance or Guarantee Insurance, is that Insurance contract by means of which the Insurer is obliged to indemnify the Insured for the damages he suffers in the event that the Policyholder fails to comply with the legal or contractual obligations he maintains with the latter.
Civil Liability Insurance
Against third parties for motorized vehicles of the Contractor affected to the execution of the Contract (They are charged in the cost of the Equipment).
Any other Insurance required by the Labor Legislation in force.
Construction and Assembly Insurance during the execution of a Project
They cover against all risks, including fire,
damage caused by natural disasters, theft, design or maintenance error and loss
of benefits, among others.
Why these Insurances?
If you are working, for example, in a Refinery and you move equipment with a Crane, there is a risk of damage and fire to the existing facilities, damage to third parties, loss of profit in case of interrupting the production of the Refinery, etc.
All these risks must necessarily have Coverage, generally the Client has already contracted this type of Insurance and does not request them from the Bidder.
Cost for Insurance
In summary, the cost to be charged for insurance is obtained
1. First, it is necessary to define with precision the types of Insurance required by the Client.
2. With these data, the estimators must obtain the corresponding quotation from the Insurers authorized by the Bidding Document.
Financial Cost | Calculate Man Hours