Practical completion and handover is the project's celebration – and the most important cut-off date in the insurance calendar: on this day, the works step out of the CAR world and into the world of operational property. There must be no gap between the two worlds, because risk never takes a break: a brand-new building can burn or flood just as easily as a half-finished one.
- Handover typically closes the CAR cover – the risks change genre, they don't disappear.
- The finished works need property insurance: building, machinery, stock – with a business interruption element for an operating company.
- The maintenance extension on the CAR side bridges the maintenance period.
- Timing the switch: the new cover should run from the day of handover – not on a "we'll sort it out later" basis.
What closes – and what doesn't?
The cover for the construction period closes: the works are no longer contract works but a finished asset. What doesn't close, though, is the contractor's obligations during the maintenance period – that's what the maintenance extension is for – and the risks of operation don't disappear either: fire, storm, water from pipes, break-in, glass breakage, machinery breakdown. The same perils, in a different contractual framework.
The new framework: the world of property insurance
Cover for the finished premises is built differently: buildings and contents insurance, stock, electronic equipment, business interruption cover for an operating company (if production stops, the costs carry on) – and alongside it, operational liability. This is already the territory of the sister site vagyon.biz: the connecting article continues there where this one ends. As a principal, the question worth asking a month before handover is: "do we already have a quote for the operational cover?"
The choreography of the switch
The right sequence: quotes for property insurance before handover (using the finished works' data: floor area, structure, technology, values); the period of cover starting on the day of handover; activating the maintenance extension on the CAR side and notifying the fact of handover; for partial handovers, tracking section by section. The steps in a checkable form: the handover checklist. Documenting the cut-off date in writing (a handover record) is decisive for claims on both sides: the start-and-end article.
Whose job is it?
Operational insurance is the owner-operator's remit – but it's part of a good contractor's service to flag the need for the switch in good time and hand over the data for it (as-built documentation, the value of what's been built in). As a broker, I help coordinate closing the project cover and building up the operational cover, so that under the applicable terms the chance of a gap is kept as small as possible. The first step here too is a consultation: book a time.
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