Engineering Management

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Engineering Management

• Assistant Prof. Dr. Korb Srinavin

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Outline

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?????????????????????(Budgeting and Estimates)
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• BUDGET FOR CONSTRUCTION PROJECTS
• In all organizations, a construction project is a
  capital investment project. Budgeting for the
  project will, therefore, be different from annual
  budgets for the organization.
• Budgeting in organization
• The usual approach in most organizations is to
  base next year's budget on this year's budget and
  expenses. A percentage is then added based on
  anticipated cost increases, thus
• Next year's budget This year's budget X,
• The value X may be based on
• 1. Get feelings,
• 2. Inflation forecasts,
• 3. Additional plans made.

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Major approaches

• 1. Top-down budgeting
• Management has been said to be better at
  judging overall project costs than the cost of
  individual parts. Top down budgeting may vary
  from an assessment of probable cost by
  individuals, costs generated through consensus of
  experts' is then broken down to individual parts.
  The broken down may use factors generated from
  experience. This approach leaves the setting of
  overall budget to the top management while lower
  level managers have to distribute budget
  allocated to them to parts under them. Using this
  approach, overall budgets may be accurate while
  errors are infighting between lower level
  managers.

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• 2. Bottom-up budgeting
• In this approach, costs are calculated for
  individual parts and then summed up for the whole
  project. There is thus the need to ensure that
  all parts are included. A major failing is that
  individuals may tend to "overstate" budgetary
  requirements in the knowledge that top management
  will reduce the budget. However, the approach
  lead to participative management making the lower
  levels not to feel that budgets are imposed.
• 3. Mixed approaches
• Top management may call for budget requests and
  then use suggestions to make a budget that is
  distributed down the organization.

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Budgeting for construction projects
24 June 2005

• Construction project budgets are, ideally based
  on estimates of costs of construction resources.
  However, most budgets are set before design is
  finalized. It thus means that there will be much
  reliance on historical costs. In practice,
  typical approaches that may be used are
• 1. Setting a fixed amount to which design should
  conform.
• 2. Using updated historical unit cost records to
  generate overall costs which is then distributed
  to parts. The overall cost will have professional
  fees added together with other expenses.
• 3. If the development of the design permits it,
  resource costs may be calculated and even project
  plans may be used for this purpose to make the
  budget time-related.

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• Important notes
• 1.A budget depends on estimates. Budgets are good
  to the extent that estimates are good.
• 2.Estimates are made by people with preferences.
• 3.Budgets made early can be used to control the
  design process.

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TENDERING BIDDING AND CONTRACTS

• Contract strategies
• 1. Choice of contractor,
• 2. Method of selecting contractor,
• 3. Organization structure to control design,
  construction and interfacing of the both,
• 4. Selection of the content and sequencing of
  work package,
• 5. Tender documents, including contract
  condition, risk allocation.

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• The tendering procedure
• 1. Open tendering
• 2. Selective tendering
• 3. Serial tendering
• 4. Negotiation tendering

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• 1. Open tendering
• The project is advertised for all qualified
  contractors to submit a bid. The job can be
  advertised in several ways such as trade
  magazine, public advertisement or local
  newspapers, designers, agency bid lists,
  organization - plan service centers and national
  publications.
• Advantage Disadvantages
• More choice Too many bidders,
• Definitely competitive Higher possibility of
  low bids

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• 2. Selective tendering
• The project owner may decide to limit the number
  of contractors (reasonably, 6-8 contractors)
  allowed to submit bids for the project. This may
  be done by having approved lists of contractors,
  then use selectively approaching contractors
  known to the owner.

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• 3. Serial tendering
• This method of tendering is for continuing work
  (which the work is done in stages).

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• 4. Negotiation tendering
• This method of tendering is that a good
  contractor may be asked to tender alone for the
  job and the price negotiated with the firm. In
  other words, the owner prior accepted the
  contractor performance (and intent the contractor
  to perform the job) but still need to negotiate
  the cost of project with the contractor prior
  proceeding.

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Approved lists of the contractors

• The owner may have an approved list of
  contractors for project. The propose is to limit
  the number of bids received for any project and
  monitor the quality of services received from
  contractors. The process of getting into the
  approved list is known as "pre-qualification" or
  "pre-selection".

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• Criteria for pre-qualification
• 1. References, reputations and past performances,
• 2. Financial stability,
• 3. Technical expertise.
• Criteria for pre-selection
• 1. References, reputations and past performances,
• 2. Financial stability,
• 3. Technical expertise,
• then add some additional criteria such as
• 4. Status of current work program,
• 5. Project-specific criteria.
• In many instances, the two procedures are
  referred to as "pre-qualification".

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• Disadvantages of pre-qualification
• 1. The need to continuously update information in
  changing market situation,
• 2. Indiscriminate distribution of company
  secrets,

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• Decision to tender
• A good contractor does not need to tender for
  every job available in the market. The decision
  to tender is based on two (2) major
  considerations as follows

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1. Information supplied

• 1.1 The name of the job,
• 1.2 The name of client and designers,
• 1.3 The name of any consultants with supervisory
  duties,
• 1.4 Location of site,
• 1.5 A general description of the work,
• 1.6 The approximate cost range of the project,
• 1.7 Details of any nominated sub-contractors/supp
  lier,
• 1.8 The form of contract to be used,
• 1.9 The procedure to be adopted in examining
  bids,
• 1.10 Whether contract is to be under seal or
  under hand,
• 1.11 Anticipated date of possession of site,
• 1.12 The period of completion of the works,
• 1.13 The duration of the tender period,
• 1.14 The period for which the tender is to
  remain open,
• 1.15 The anticipated value of liquidated damage
  (if any),
• 1.16 Details of bond requirements (if any),
• 1.17 Any particular conditions relating to the
  contract.

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2. Company consideration

• 2.1 The company's current workload, turnover and
  recovery of overheads,
• 2.2 The company's financial resources,
• 2.3 The availability of resources to undertake
  the job,
• 2.4 Type of work,
• 2.5 Location of the contract,
• 2.6 The identity of the client or promoter and
  his/her representatives,
• 2.7 A detailed examination of the contract
  documents.
• If the company decides to tender, an of
  cost is prepared and a tender submitted in
  accordance with owner's requirements. Normally,
  estimate preparation will only be done after
  through "site investigation".

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Estimating process

• The following steps describe the process of
  producing a cost estimate by the contractor as a
  basis for tender submittal
• 1. Decision to tender,
• 2. Programming the estimate,
• 3. Collection and calculation of cost information
• 3.1 Labour,
• 3.2 Plant,
• 3.3 Materials,
• 3.4 Sub-contractors,

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• 4. Project study
• 4.1 Drawings,
• 4.2 Site visit,
• 4.2.1 Description of site,
• 4.2.2 Position of existing services,
• 4.2.3 Description of ground conditions,
• 4.2.4 Any problem related to the security of
  the site,
• 4.2.5 A description of the access to the site,
• 4.2.6 Topographic details of the site,
• 4.2.7 A description of the facilities available
  for the disposal of soil,
• 4.2.8 A description of any demolition works of
  temporary works to adjoining building,
• 4.3 Method statement

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• 5. Preparing the estimate
• 5.1 Operational estimating,
• 5.2 Unit rate estimating,
• 5.3 Combined method, operational and unit rate
  estimating,
• 6. Site overheads
• 6.1 Site staff,
• 6.2 Cleaning site and clearing rubbish,
• 6.3 Site transport facilities,
• 6.4 Mechanical plant which is not included in
  item rates,
• 6.5 Scaffolding and gantries,
• 6.6 Site accommodation,
• 6.7 Small plant,
• 6.8 Temporary services,
• 6.9 Welfare, first aid and safety provisions,
• 6.10 Final clearance and handover,
• 6.11 Defects liability,
• 6.12 Transport of workers to site,
• 6.13 Abnormal overtime,
• 6.14 Risk

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• 7. Estimator's report
• 7.1 A brief description of the project,
• 7.2 A description of the method of construction,
• 7.3 Unusual risks which is not covered in
  contract documents,
• 7.4 Unresolved or contractual problems,
• 7.5 Design assessment and financial
  consequences,
• 7.6 Assumptions in estimated,
• 7.7 Assessment of the profitability of the
  project,
• 7.8 Other market and industrial information,

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• The cost of work to be included in the estimates
  are reported to senior management in cost reports
  containing the following details
• 1. Main contractor's labour,
• 2. Main contractor's plant allocated to rates and
  in preliminaries,
• 3. Main contractor's materials,
• 4. Main contractor's own sub-contractors,
• 5. Sums of nominated sub-contractors,
• 6. Sums of nominated suppliers,
• 7. Provisional sums and dayworks,
• 8. Contingencies,
• 9. Amounts included for attendance on
  sub-contractors,
• 10. Amounts included for materials and
  sub-contract cash discounts.

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???????????????????????????? (Introduction to
Engineering Economics)
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• See ???????????1, 2 3 .ppt
• ???????????1.ppt
• ???????????2.ppt
• ???????????3.ppt

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?????????????????? ???????????????(Engineering
Contracts and Insurance)
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• PROJECT DELIVERY SYSTEMS FOR CONSTRUCTION
  PROJECTS
• Project delivery system is an organization which
  assigns specific responsibilities and authorities
  to people and organizations, and which defines
  relationships of the various elements in the
  construction of a project. There are four (4)
  basic project delivery systems

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1. The engineering-contractor (E-C) system

• in which responsibility for engineering,
  materials acquisition and construction are
  assigned to one responsible organization.
  Sometimes E-C is referred to as "turn key
  system". Owner will usually that there is no
  overall project manager that can speak for both
  engineering and construction.
• Advantages
• 1) One responsible contract for the owner with
  materials acquisition and construction closely
  coordinated with engineering,
• 2) Moderate owner participation,
• 3) Improved construction completion date over
  the EC system,
• 4) Improved costs and quality by liaison
  utilization without contractual problems and
  delay of project completion.
• Disadvantages
• 1) Inability to establish form project cost in
  the early stages of construction,
• 2) More problems in labour relations for a large
  national operator as opposed to a local
  contractor,
• 3) Only fair "checks and balances" on the E-C
  apply in contrast with separate contracts for
  engineering and construction,
• 4) The problem of controlling project cost,
  particularly in monitoring accumulated cost as
  construction progresses and projecting final cost
  from monitoring effort.

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2. The engineering-plus-contractor (EC) system

• in which engineering is assigned to one
  organization and after all engineering is
  completed, material acquisition and construction
  are assigned to another organization, during the
  period when engineering is in progress, there is
  a direct relationship between the owner and the
  engineer, at that time, no contractor is
  involved, when engineering is completed and a
  construction contract is in effect, there will be
  direct and responsible relationships between the
  owner and the contractor and between the engineer
  and the contractor, the relationship between the
  owner and the engineer will still be maintained.
• Advantages
• 1) An accepted historically supports system with
  legal and contract precedents well established,
• 2) Provision of good checks and balances between
  the owner, engineer and contractor,
• 3) Determination of project cost before
  construction contracts are let.
• Disadvantages
• 1) Construction expertise does not benefit design
  (minimal E-C liaison),
• 2) The longest project completion time,
• 3) Maximum owner participation,
• 4) Greater coordinating and administrative costs
  on the part of the owner in most cases.

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3. The professional construction manager (CM)
system

• in which a competent construction manager
  with no vested interests in design or
  construction brings the practical construction
  viewpoint to bear during the design phase and
  using phased construction, provide overall
  management for all construction elements,
  professional construction manager as a focal
  point for the relationships of the three (3)
  basic elements, these relationships persist
  during the entire life of the project, the
  professional construction manager has had an
  important role in the development and
  presentation of the engineering design on the
  basis of his contribution to construction
  practicability, suitability and cost, and will
  also have strong voice in the interpretation of
  engineering design as well as provide an
  excellent control in times of rapidly changing
  costs and economic uncertainty,
• Advantages
• 1) Application of special construction skills
  with no conflict of interest (excellent E-C
  liaison),
• 2) Moderate owner participation,
• 3) Independent evaluation of costs, schedules and
  construction performance,
• 4) Good coordination of engineering and
  construction,
• 5) Minimal time for project completion,
• 6) Best system to construct a project during a
  period of rapidly changing costs and economic
  uncertainty,
• 7) Application to any project delivery system if
  function is clearly defined.
• Disadvantages
• 1) Usually no firm project cost establishment in
  the early stages of construction,
• 2) Another layer of responsibility and
  administrative cost,
• 3) Forcing of the owner or his agent into the
  position of referee in settling differences
  between construction elements,
• 4) Lack of fiscal responsibility on part of
  professional construction manager.

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4. The professional specification (PS) system

• in which a lump-sum contract is placed with
  one organization which provides a complete
  "turnkey project", including engineering,
  materials and construction on the basis of a
  performance-type specification, in this system,
  the engineer is chosen by the contractor on the
  basis of his special knowledge and experience
  relating to the project and to the construction
  methods to be used, thus, there is a direct
  relationship to the construction and engineering
  but "none" between the owner and engineer.
• Advantages
• 1) Lowest possible cost and excellent time of
  completion,
• 2) Determination of project cost before
  construction contract is let,
• 3) Minimum owner participation,
• 4) One responsible contract for the entire
  project,
• 5) Provides economical variation in details of
  construction without affecting performance of
  finished project.
• Disadvantages
• 1) Details of construction sometimes causing
  personal dissatisfaction,
• 2) Unsatisfactory or barely satisfactory
  completed project performance may be occurred,
• 3) Limited chance for owner to select most
  acceptable details of construction or equipment,
• 4) Limited application except for highly
  specialized or standard designs.

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CONSTRUCTION CONTRACTS

• A contract is an agreement between two (2) or
  more parties for a specific purpose. For the
  specific case of construction, it is an agreement
  between the owner and the contractor to get a
  facility built. However, there may be other
  contracts in a construction contracts such as the
  contract between a supplier/sub-contractor and
  the main contractor.

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• Conditions for contracts
• 1. Consideration (the purposed obligation between
  both parties) "Contract cannot be signed for
  nothing".
• 2. Meeting of minds
• Both parties have the same "objectives" to enter
  the contract.
• 3. Intention to enter into binding agreement
• Each party has a willingness to enter the
  contract.

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• Entering into a contract usually progresses
  through three (3) stages
• 1. Invitation to treat
• A first party (A) makes an invitation to another
  party (B) to consider entering into a contract
  for a stated purpose. In a construction contract,
  the owner usually invites contractors to bid by
  making bidding documents available to them.
• 2. Offer
• Party B having throughly considered the
  conditions attached to A's invitation, may decide
  to act on the invitation by making an offer. For
  instance, the contractor may decide to submit a
  bid and by the bid, he offers to build for a
  price and is at liberty to state his conditions.
• 3. Acceptance
• Party A concludes the contract by accepting B's
  offer. A contract is then signed between the two
  parties and the work, in the case of
  consideration, executed according to the contract
  conditions.

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Four (4) basic type of construction contracts

• 1. Lump-sum contract
• Lump sum contract, is sometimes referred to as
  "fixed cost contract" which the contract price is
  stated as a total sum of the project. This is
  based on the estimates of costs by the contractor
  and addition to cover profit and risk. It is
  assumed that the contract work will be undertaken
  for that price. It is the contractor's
  responsibility to estimate costs carefully, and
  ensure that construction costs on site are well
  calculated for prompt payments.
• This method can be applied only in case that the
  scope of work is clearly defined. In other words,
  design drawings and all the related documents
  such as specification are completed and
  available. In practice, this method is suitable
  for the project which construction period is
  relatively short (say ? 1 year).
• Price Cost Markup (profit, tax, overhead,
  risk)

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• 2. Time-materials contract
• The contractor undertakes the job, the owner pays
  for construction costs and "adds" a fee for
  management by the contractor. It is necessary to
  have a reputable and efficient contractor who
  will undertake detailed accounting for this
  contract. The contract type is very good when
  work must be started early of time is the
  critical issue and for construction of
  specialized projects.
• Time-materials contract, is sometimes referred to
  as "cost plus contracts" comprise four (4)
  different categories
• 2.1 Cost plus fixed fee,
• Price Cost Specified amount of fee,
• 2.2 Cost plus fluctuated fee
• Price Cost Amount of fee depending on
  fluctuation of construction cost,
• 2.3 Cost plus percentage fixed fee,
• Price Cost Percent fixed fee,
• 2.4 Cost plus percentage fluctuated fee
• Price Cost Percent fluctuated fee.

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• 3. Guaranteed-maximum-price contract
• The contractor agrees to undertake the project
  for a fixed price (X) and also gives a guarantee
  that a ceiling price will not be exceeded unless
  the owner makes further additions to the work.
  Good management by the contractor is crucial to
  successful application of this type of contract.
• In guaranteed-maximum-price contract, the owner
  gets savings while the contractor takes the risk.
  
• Price Fixed price with a guarantee that a
  ceiling price will not be exceeded unless the
  owner makes further additions to the work.

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• 4. Management contract
• A contractor takes over the responsibility of
  management for a contract. He/she may or may not
  execute part of the work himself/herself but has
  overall responsibility to plan and supervise
  construction work, approve changes, budget and
  control the execution of the project.

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Build-operate-transfer (BOT) project and contract

• Build-operate-transfer were developed a means for
  involving private developers in government
  infrastructures projects. Many developing
  countries now see this approach as the best way
  to provide basic infrastructures. transit system.
• Arrangement of BOT projects
• 1. Build
• 1.1 Inception and Concessionaire,
• 1.2 Design,
• 1.3 Management of project and implementation,
• 1.4 Carrying out the procurement,
• 1.5 Construction (build the project),
• 1.6 Finance (getting loan and debt services),
• 2. Operate
• 2.1 Management and operation,
• 2.2 Maintenances,
• 2.3 Delivery of product and/or services,
• 2.4 Receive delivery payment,
• 3. Transfer
• Handover in operating condition at the end of
  contract period to the responsible sector/agency.

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• Forms of contracts
• Forms of contract usually follow the type of
  contract. However, a form may be prepared by
  different organizations. Contract forms can be
  classified under the followings
• 1. International forms, for example, FIDIC,
• 2. Local forms,
• 3. Company/organization forms.
• Forms of contract need specific tailoring to suit
  project situations.

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• Award of contract
• Most construction contracts are awarded on the
  basis of competitive bidding. A contract is
  usually awarded to the "lowest responsible
  bidder" (or "lowest responsive bidder"). Nearly
  all public contracts use this approach.
• The owner makes decision regarding responsibility
  after the bid has been opened. The lowest
  responsible bidder has been defined as "the
  lowest bidder whose offer best responds in
  quality, fitness and capacity to the particular
  requirements of the proposed work".

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• The owner may request qualification information
  to be submitted with bids or undertake
  pre-qualification of contractors. Followings may
  be included as criteria for judging
  irresponsibility
• 1. Default on previous contract,
• 2. Proof of dishonesty,
• 3. Past difficulties in completing projects on
  time,
• 4. Reputation for uncooperativeness and
  non-standard practices.
• The surety's recommendation may be relied upon
  for judging responsibility. The surety, for the
  purpose of issuing bonds will consider the
  followings
• 1. Finances,
• 2. Experience record,
• 3. Other qualifications.
• The chosen contractor is issued a "notice of
  award" which is forwarded with information on how
  and when the contract will be signed. The notice
  sets forth the conditions of award in form of a
  letter.

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• Letter of intent
• In some cases, the owner may want the contractor
  to start working before contracts can be signed.
  A letter of intent is issued by the owner to the
  contractor a evidence that there is intention to
  enter a legal relation. The letter will also
  state the limits of liability as well as the
  types of work that the contractor should begin.

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• The contract documents
• The contract defines exactly and explicitly the
  rights and obligations of each party to the
  contract. Construction contracts are
  traditionally lengthier than other commercial
  contracts because of the unique nature of the
  product or service.
• The essential documents that make up the
  construction contracts are as follows
• 1. General conditions,
• 2. Supplementary conditions,
• 3. Technical specifications,
• 4. Drawings,
• 5. Addenda (which are others documents/things
  needed to be included),
• 6. Agreement.

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• Advertisement, invitation for bids, instructions
  to bidders and proposal are preliminary to the
  contract but are usually included by reference.
  Performance and payment bonds may also be
  considered as part of the documents.
• The documents collectively define what is
  intended by the contracting parties. A person
  should read before signing as failure to do so
  does not excuse one from the contract.
• Standard forms of contracts are in general use
  because contractors prefer documents and terms
  with which they are familiar.

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• The agreement
• The agreement is specifically designed to
  formalize the contract. It is the single
  instrument that brings together the contract
  segments by reference and functions for the
  formal execution of the contract. It presents a
  condensation of the contract elements, stating
  the work to be done and the price to be paid for
  it, and providing suitable spaces for the
  signatures of the parties. The agreement usually
  contains clauses not in the conditions
  (supplementary clauses) such as the completion
  time of the project, liquidated damages, penalty,
  particulars concerning the payments to the
  contractor and that list the contract documents.

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• The agreement may be a standard form or specially
  prepared for that purpose.
• Types of construction contracts shall be as
  follow
• 1. The lump-sum contract,
• 2. The unit-price contract,
• 3. Cost plus contracts,
• 4. Special reimbursable contracts,
• 5. Cost-plus-percentage-of-cost contracts,
• 6. Cost-plus-fixed-fee contracts,
• 7. Incentive contracts,
• 8. Guaranteed maximum cost contract.

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• Contract clauses
• Clauses are nontechnical provision that pertain
  to the conduct of the work. Contract clause
  constitute the general conditions, supplementary
  conditions and provisions of the agreement.

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CONSTRUCTION INSURANCE

• Construction harzards
• Discussion on accidents in construction has shown
  that construction is a hazadous undertaking. The
  contractor therefore, needs to protect
  himself/herself against liabilities that may be
  incurred through accidents, strikes, etc to
  prevent ruinous financial losses.
• Liabilitiy for accidents can devolve on the owner
  or architect/engineer as well as on the main
  contractor and sub-contractors. Contracts
  normally, require the contractor to protect the
  owner against such liabilities. Thus, the
  contractor is often required to protect others as
  well as himself/herself.

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• Insurance policy
• An insurance policy is a conditional contract in
  which the insurer promise for a consideration, to
  assume financial responsibility for a "specific"
  loss or liability. It is a legal document
  containing many provisions pertaining to the loss
  against which it affords protection.
• The law of insurance is very close to law of
  contracts. Each country of state will have laws
  regulating insurance practice.
• A loss suffered by the contractor as a result of
  own deliberate actions cannot be recorded under
  the insurance policy. His/her negligence will not
  invalidate the policy. Premiums are usually paid
  before policies take effect and the contractor
  may only claim to the extent of loss.
• An insurance firm may either be organized as a
  stock company or as a mutual company. In stock
  companies, ownership is vested in the
  stockholders. In mutual companies, policy holders
  constitute the members of the insurance company
  or association.

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• Contract requirements
• A standard contract normally requires the
  contractor to provide certain convergences such
  as followings
• workmen's compensation insurance,
• contractor's public liability and property
  damage insurance,
• contingent liability insurance.
• Property insurance and owner's liability
  insurance may be made the responsibility of
  owners or contractors. Special insurances may
  also be required depending on the perceived risks
  of the project.

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• Legal requirements
• Workmen's compensation, mortor vehicle,
  unemployment and social security insurance and
  others may be required by the law. As such, the
  contractor has to provide these insurances
  whether or not they are included in the contract.
  
• The main contractor has a contingent liability
  for the action of sub-contractors.

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• Analysis of insurance risks
• It is not economical for the contractor to carry
  all insurances available, otherwise, too much
  premiums will be paid. For insurable risks, the
  cost of premiums must be balanced against the
  "likely" loss.
• Careful planning and sticking to the rules in
  construction may minimize the need for insurance.
  Calculated risks may be taken rather than
  providing insurance, for examples, working near
  existing/old structures, piling, water damage,
  etc.

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• Factors to be considered
• In arriving at a decision to what to insure and
  what costs to pay, following factors have to be
  considered.
• 1) The obligation under the contract for loss or
  damage to the work and injury or damage to third
  parties.
• 2) The probabilities of loss inherent in the type
  of project.
• 3) The geographical location of the project.
• 4) Exposure to specific perils such as
  earthquake, flood, etc.
• 5) Whether major parts of the work are to be done
  by sub-contrcators.
• 6) The comparative cost of a full insurance
  program versus self-insurance and.or deductible
  forms of insurance.

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• Check list for construction insurance
• 1. Property insurance on project
• 1.1 All risk, builder's risk insurance
• 1.2 Builder's risk for fire
• 1.2.1 Extended coverage endorsement
• 1.2.2 Vandalism or malicious mischief
  endorsement
• 1.2.3 Water damage endorsement
• 1.2.4 Sprinkler leakage endorsement
• 1?3 Earthquake insurance
• 1.4 Bridge insurance
• 1.5 Steam boiler and machinery insurance
• 1.6 Installation floater policy

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• 2. Property insurance on contractor's own
  property
• 2.1 Fire insurance on contractor's own building
• 2.2 Contractor's equipment insurance
• 2.3 Motor truck cargo policy
• 2.4 Transportation floater
• 2.5 Burglary robbery and theft insurance
• 2.6 Fidelity bond
• 2.7 Dishonesty, destruction and disappearance
  policy
• 2.8 Valuable papers destruction insurance
• 3. Liability insurance
• 3.1 Employer's liability insurance
• 3.2 Contractor's public liability and property
  damage insurance
• 3.3 Contractor's protective public and property
  damage liability insurance
• 3.4 Contractual liability insurance
• 3.5 Owner's protective liability insurance
• 3.6 Completed operations liability insurance

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• 4. Employee insurance
• 4.1 Workmen's compensation insurance
• 4.2 Old-age, survivors and disability insurance
• 4.3 Unemployment insurance
• 4.4 Disability insurance
• 5. Motor vehicle insurance
• Various types are available both to protect own
  vehicles and vehicles used on behalf of the
  contractor.
• 6. Business accident and life insurance
• 6.1 Business interuption insurance
• 6.2 Sole propietorship insurance
• 6.3 Accident insurance on partners or keymen
• 6.4 Life insurance on partners or keymen
• 6.5 Group life insurance
• 6.6 Group hospitalisation insurance

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• Project property insurance
• It is depended on the contractors to protect the
  project from loss or damage and to see that
  suitable insurance cover is provided. The
  construction contract may specify what covers are
  mandatory. The contractor may take additional
  steps to protect himself/herself as the job is
  his/her responsibility except where "acts of
  devil (natural disasters)" are involved.
• All risks builder's insurance
• This type is commonly used for building projects
  and covers the project and temporary structures.
  Materials already bought irrespective of their
  locations and equipment on site except if under
  another cover, are covered by this insurance.

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• Builder's risk fire insurance
• The basic form protects against direct loss due
  to fire and lightning. It usually covers only the
  items stated in it or all materials adjacent to
  the structure and supplies incidental to the
  construction.
• The policy may cease if the structure is occupied
  or abandoned for more than 60 days.
• Endorsement to the basic coverage are usually
  purchased to extend the cover to other items such
  as wind, earthquake, etc.

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• Builder's risk premium
• 1. Reporting form
• Reporting form requires the contractor to report
  progress of work and materials in store monthly
  to enable the insurable value to be determined,
  The premium is paid in monthly installment.
• 2. Completed value form
• Completed value form is paid lump-sum in advance
  and covers the value of the completed structure.
  The premium is fifty (50) percent of maximum fee
  as the work is assumed to have zero (0) value at
  the begining progressing linearly.

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• Contractor's equipment floater
• This protects from loss or damage to construction
  equipment, but does not include liability
  coverage. It can cover all equipment for which
  the contractor is legally responsible.
• Large equipment must be listed with all details
  while small items are given blanket cover. The
  equipment is usually insured against the
  depreciated or value.
• The cover can be made flexible as the contractor
  desires.

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• Fidelity bonds
• A fidelity bond is a contract under which any
  loss sustained by an employer because of the
  dishonestly of the employee covered by the
  contract are made good by the surety. There are
  three (3) types of fidelity bonds.
• 1) Name bond,
• 2) Position bond,
• 3) Blanket bond.
• Statutes of limitations
• Many countries and states have statutes that
  protect the contractor from indefinite liability
  for failure of constructed facilities. Such
  limitations vary from four (4) years to twenty
  (20) years depending on local laws.
• Insurance claim
• It is important that all compensable claims be
  brought to the attention of the insurers at the
  shortest possible time. To this end, the
  contractor needs to designate someone for the
  purpose of renewals of policies, reporting,
  filing, cancellations, etc.

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????????????????????????(Safety Management)
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?????????????????????????????(Claims and
Disputes)
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???? (Other Related Topics)
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???????????????????? (Class Presentations)
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