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With the major impact of the COVID-19 outbreak, contractors appreciate the need for insurance coverage even more.  You may be safely covered by Force Majeure and pandemic clauses in your policies. However, you may still be wondering how to deal with the associated costs related to the COVID-19 outbreak risks. In this article, let’s look at some of the steps you can take to handle your insurance position during the pandemic:


  • Calculate Potential Impacts:

The first crucial step is to compute and analyze the potential impacts that the outbreak will have on your projects. These can include cost overruns, time overruns and loss of skilled labor.  This step is essential in helping you to understand the extent of the impact. You can then make informed decisions on the most appropriate course of action to take to lessen the risks.



  • Review your Construction Contract:

The next step is to review your construction contracts for any Force Majeure clauses. The definitions that count as Force Majeure may or may not include pandemics such as the Corona Virus outbreak.  If the terms are not clear, refer with the client and relevant parties. Discuss the apportionment of liability and allocation of risk, and costs associated with the impacts of the COVID-19 outbreak.



  • Issue Notices:

You will need to act upon any measures outlined in your contract regarding a pandemic. This could involve the issuing of notices that indicate the extent of impacts and the preferred course of action. This can include compensable costs or extension of time, among others.



  • Check your Insurance Policy:

Having figured out what costs are not covered by your client in the construction contract, check your insurance policy. Moreover, determine what costs may be included under your coverage. These may comprise of:

  • Time-related costs
  • The costs as a result of delays in material delivery and obtaining of skilled workers
  • Costs for loss of profits as a result of the suspension of works
  • The costs associated with idle hired machinery or equipment



  • Talk with your Insurance Providers

The next step is to talk with your insurance agent to verify what would be covered, the terms and conditions, and the necessary steps for filing claims. Furthermore, we will discuss all the available options and advise you on potential solutions. It may be necessary to review your insurance coverage and upgrade it to one that most fits your current business, for future purposes.


We’re Here to Assist You

Insurance policies cover a great deal of the losses suffered by the construction industry.  Cushioning your business against financial losses and potential bankruptcy. This is why it is important for you to carry out risk management practices within your businesses.

John Brown President Farmer Brown Insurance (888) 973 0016

John Brown – President

Find out the highest impact risks, as well as the highest probability risks for allocation to your insurance coverage.  Making sure you have adequate coverage for any potential risks during such pandemics is essential. Of course, your insurance may not cover Covid-19. Ask us, we will assess and assist. For more details, give Farmer Brown Insurance a call on (888) 973-0016.

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