The Impact of Insurance Policies on Building Project Contracts
Chapter One
OBJECTIVE OF THE STUDY
This study was conducted with the following objectives:
- Identify the various construction risks faced by the construction industry
- Assess the benefits the Construction industry derives from using insurance as a risk management tool;
- Examine the response of the construction industry towards the use of the Contractors All Risk policy (CAR)
- Find out solutions to the challenges that the construction industry encounters in using insurance.
CHAPTER TWO
REVIEW OF RELATED LITERATURE
INTRODUCTION
This chapter reviews the literature on the insurance policies on building project contracts. It discusses issues arising from the topic of interest as viewed from different perspectives, with a view of giving a theoretical and empirical foundation to the study.
LITERATURE REVIEW
RISK MANAGEMENT
The construction industry inherent momentous amount of risks; as it is portrayed with a unique characteristic in which most of its products are exceptional in respect of form, size and purpose. In addition, the products of construction differ widely in terms of location, materials, production techniques, and the standards of the finished product with respect to space, quality and durability. Moreover, the construction processes witness the involvement of diverse parties throughout projects lifecycle; each of which carryout different perspective and cultural background. On the other hand, the severe competition endured by the construction organizations and the low margin of profit has always acted as motivators to seek better opportunities not only for organization growth but also its bare survival within the industry. Nevertheless, the tendency towards construction industry is never affected by the individuality of its practices; but it is encouraged by the continuous demand for new facilities that cannot be achieved without the existence of gut practitioners prepared to handle the unexpected involved within practicing such line of business. Construction insurance is a practice of exchanging a contingent claim for a fixed payment to protect the interests of parties involved in a construction project.
Construction insurance is a major method of managing risks in the construction industry. Its primary function is to transfer certain risks from clients, contractors, subcontractors and other parties involved in the construction project to insurers to provide contingent funding in time of difficulty. Construction insurance plays an increasingly important role in guaranteeing the success of projects, with insurers sharing losses resulting from natural disasters and other contingencies. However, insurance sometimes doesn’t receive the attention it deserves because practitioners do not have a clear understanding of risk allocation and the strategy of risk management through insurance.
Nature of Construction Risks
The sensitivity of construction projects to an extremely large matrix of risks is due to the inherent characteristics of construction projects (Bunni, 2003). A construction project is a unique product. It has:
CHAPTER THREE
RESEARCH METHODOLOGY
Research design
The researcher used descriptive research survey design in building up this project work the choice of this research design was considered appropriate because of its advantages of identifying attributes of a large population from a group of individuals. The design was suitable for the study as the study sought to find out the impact of insurance policies to building projects using selected construction companies in Anambra state.
Sources of data collection
Data were collected from two main sources namely:
- Primary source and
- Secondary source
Primary source:
These are materials of statistical investigation which were collected by the research for a particular purpose. They can be obtained through a survey, observation questionnaire or as experiment; the researcher has adopted the questionnaire method for this study.
Secondary source:
These are data from textbook Journal handset etc. they arise as byproducts of the same other purposes. Example administration, various other unpublished works and write ups were also used.
Population of the study
Population of a study is a group of persons or aggregate items, things the researcher is interested in getting information regarding palm oil trade and its socioeconomic impacts. Two hundred (200) construction company officers in selected construction companies in Anambra State were selected randomly by the researcher as the population of the study.
CHAPTER FOUR
PRESENTATION ANALYSIS INTERPRETATION OF DATA
Introduction
Efforts will be made at this stage to present, analyze and interpret the data collected during the field survey. This presentation will be based on the responses from the completed questionnaires. The result of this exercise will be summarized in tabular forms for easy references and analysis. It will also show answers to questions relating to the research questions for this research study. The researcher employed simple percentage in the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
INTRODUCTION
It is important to reiterate that the objective of this study was on the insurance policies to building project contracts.
In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in evaluating examine the role of on the insurance policies to building project contracts.
SUMMARY
This study was undertaken to examine the on the insurance policies to building project contracts. The study opened with chapter one where the statement of the problem was clearly defined. The study objectives and research questions and hypotheses were defined and formulated respectively. The study reviewed related and relevant literature in the chapter two alongside the conceptual framework, empirical and theoretical studies. The third chapter described the methodology employed by the researcher in collecting both the primary and the secondary data. The research method employed here is the descriptive survey method. The study analyzed and presented the data collected in tables and the hypotheses were tested using the Spearman Rank Order While the fifth chapter gives the study summary and conclusion.
CONCLUSION AND RECOMMENDATIONS
The insurance policies to building project contracts is a topic with high priority. In this work we found out that, There is various construction risk faced by construction industry and there are benefits Construction industry derives from using CAR insurance as a risk management tool.
REFERENCES
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- ASCE Committee on Professional Practice (ASCE). (2004). “Mitigating Professional Liability for Civil Engineers: White Paper.” Leadership and Management in Eng ., October 2004, 141-147.
- Associated General Contractors of America (AGC). (2000). Standard Form of Agreement and GeneralConditions Between Owner and Contractor, AGC 200.
- Williams, C. A., Smith, M. L. and Peter, C. Y. (1998) Risk management and insurance, Irwin/McGraw-Hill, Boston, Mass.
- Wassmer, L. (1998) Contractors’ All Risks insurance, Swiss Reinsurance Company, Zurich.
