Zurich Canada Builders Risk New Forms and Enhancements
A clearer, stronger Builders Risk offering
What s changing? We are introducing two new base coverage forms to meet changing market demands and the needs of our customers. The new forms clarify coverage details that were missing or were vulnerable to interpretation in the old form (ZC 6308), reducing the chance of errors. These changes, including the incorporation of many frequently used endorsements within the forms themselves, are designed to help streamline the process for our brokers and customers. We believe these more comprehensive forms strengthen our Builders Risk offering. New base coverage forms Zurich Completed Value Builders Risk (PBR - ZC 6559) Our Project Builders Risk (PBR) policy addresses a single project on a single policy for the duration of the construction works. Zurich Master Builders Risk (MBR - ZC 6565) Our Master Builders Risk (MBR) policy provides a portfolio/ open cover approach to cover many projects under a single policy. New base coverage forms will be used in conjunction with the Common Conditions forms (PBR - ZC 6560 and MBR - ZC 6566). Statutory Conditions and General Conditions form (ZC 6300) will continue to be attached to the policy, as well as the Standard Mortgage Clause form (ZC 6301) if applicable. Terrorism Exclusion (ZC 5264) will continue to apply as in the past.
Coverage Terms Terms of ending coverage Both new forms simplify the terms of when coverage ceases, eliminating form 6308 s occupancy limitation clause and the clause canceling coverage if a site was left unattended or construction activity had ceased for 30 consecutive days. Coverage now ends at the earlier of the following: A) The first Named Insured s interest in the insured project ceases B) Policy expires or is cancelled The loss or damage must occur during the policy period stated in the Declarations. Property Insured The new forms clarify language on loss or damage as follows: Covers direct physical loss of or damage to Builders risk property * caused by a covered cause of loss while such property is: At the project site In transit Escalation Clause The Escalation Clause (Section F.2.) is built into the forms and the agreed percentage is shown on the Declarations. This eliminates the need for Form ZC 6376. Clarity on other coverage terms and conditions The new forms include revised wording on coverage terms and conditions that can help clear up confusion connected to the older form. We encourage you to review these terms and conditions to see which details can benefit your customer relationships. Additional Insured (Coverage Form Section G.) Deductible (Coverage Form Section H.) Valuation (Coverage Form Section I.) Temporary Offsite Location(s) Green Materials coverage Loss Adjustment/Payment Subrogation At a temporary offsite location * Builders risk property is defined as property under construction, landscaping materials and temporary works all of which are individually defined terms to clarify intent.
New Coverage Extensions Forms ZC 6559 and ZC 6565 offer the following new coverage extensions: Construction Trailers Contract Penalties Crane Re-Erection Expenses Damage to Existing Real Property Limited Design Professional Fees Property Excluded/ Not Covered Forms ZC 6559 and ZC 6565 provide greater detail on what is excluded or not covered. In particular, the new forms do not include any exclusions for electrical arcing, trailers or data (certain perils are excluded under Electronic Vandalism, Defects or Errors of Section C. Exclusions), all of which were previously excluded. Emergency Property Protection Expense Reward Payments Spare Construction Materials Existing extensions previously found in multiple forms are now included in ZC 6559 and ZC 6565, providing a more complete overview of coverage extensions. Common Conditions Perils Excluded Forms ZC 6559 and ZC 6565 add the following to the existing list of Perils Excluded: Governmental Action seizure, confiscation or destruction of property at the order of any government Re-sequencing or inefficiencies of construction activities (under Consequential Loss) Cracking and Settling damage from normal subsidence, settling, cracking, etc. Warranties or Guarantees Damage to landscaping from hail or weight of ice and snow Updates to the Common Conditions forms (PBR - ZC 6560 and MBR - ZC 6566) include: Marine Joint Loss Agreement (50/50 clause) This clause reduces potential finger pointing and helps expedite payment by allowing for a proportional share of loss when damage to property cannot be determined to have occurred under a Marine or Builders Risk policy. Alternative Dispute Resolution (ADR) Where allowed, this clause functions similarly to the In Case of Disagreement clause (Alberta). It allows for multiple means of coming to agreement on claims settlement (e.g., binding arbitration or non-binding mediation). Transit More expansive coverage territory now stated and detailed in the forms. The new forms also eliminate certain previous exclusions.
Where Can I Find It? As this quick cross-reference guide shows, the new, more inclusive forms incorporate coverage information previously found on multiple attachments to the old form (ZC 6308). It s a clearer path to seeing more of what Builders Risk has to offer. Old Form (ZC 6308) Attachments 6371 Professional Fees 6373 By-Laws 6374 Debris Removal 6375 Decontamination Expenses 6376 Escalation of Contract Value 6377 Fire Department Charges 6378 Fire Protective Device Refills 6379 Ingress/Egress 6381 Off premises Services 6383 Water Damage Deductible 6384 Testing & Commissioning* 6466 Better Green Coverage 6524 Equipment Breakdown 6323 Earthquake Extension 6324 Flood Extension 6370 Extra and/or Expediting Expenses Now you can find it all here!* Zurich Completed Value Builders Risk (PBR - ZC 6559) Zurich Master Builders Risk (MBR - ZC 6565) *Included in base forms or extensions 6369 Soft Costs 6380 Delayed Start-Up 6382 Permission to Occupy 5264 Terrorism Exclusion *6547 Start-Up and Testing Endorsement addresses Hot Testing 6538 Delay in Completion Endorsement 6538 Delay in Completion Endorsement 6548 Occupancy Exclusion Same attachment
Delay in Completion The following clarifications or updates to Delay in Completion terms can be found in full detail within forms ZC 6538 and ZC 6568: Coverage Details and defines Business Interruption, Rental Value, Soft Costs and Additional Interest & Financing Expenses Includes newly added categories to Soft Costs: Insurance premiums Project administration expense and general overhead, such as temporary leasing or rental expense, clerical expense and other similar expenses Advertising and promotional expense Testing and quality control costs Exclusions Modifies Consequential Loss exclusion of base coverage form to remove Delay in Completion (as it s now provided) and introduces additional scenarios in which coverage won t apply Limitations Limits placed on Commercial Operations, Idle Periods, and Strikers or Others Causing Delay Coverage Extensions Extends Delay in Completion Coverage to include Civil Authority, Ingress or Egress, and By-Laws, Regulation, Ordinance or Law Limit of Insurance Separate limits are stated for each of the four coverages on a per occurrence basis The limits are part of the Policy Limit (not in addition to it) All coverage provided for Delay is capped at a Delay Aggregate Limit of Liability, regardless of the number of occurrences Deductibles Provides applicability of deductible waiting periods as they apply to each coverage; this was not available in form 6380 Optional Coverage Monthly Limitation Allows for Business Interruption or Rental Value to be limited to a monthly amount; this was not available in form 6380 Additional Definitions Added to existing definitions regarding Delay in Completion Anticipated Date of Completion Period of Indemnity Waiting Period Deductible The introduction of the new Builders Risk forms is part of Zurich s ongoing efforts to be responsive to customers needs and improve our products. With these changes, we continue to develop better ways to serve the construction industry and help customers understand and protect themselves from risk. Questions? Please contact your local Zurich Underwriter for more information or contact: Katherine Ionni, CIP Head of Construction Commercial Insurance Zurich Canada Katherine.Ionni@zurich.com
Zurich 416-586-3000 www.zurichcanada.com 2017 Zurich Insurance Company Ltd All rights reserved. The Zurich logo and Zurich are trademarks of Zurich Insurance Company Ltd This training material is designed to provide general information about the subject matter of this training session, without any warranties of any kind, expressed or implied. We reserve the right to amend the content but have no duty to update the training material. The training material is copyrighted material and may be used solely in conjunction with this training session and provided to registered attendees of the training session. Unless otherwise permitted in writing, any other use or purpose, including copying, reproduction, modification, distribution of the content, is strictly prohibited. In the event software or systems are distributed with the training materials, any other use of such software or systems, derivatives thereof or reverse engineering thereof, is strictly prohibited A1-112009437-A (05/17) 112009437