ONE HUNDRED PROBLEMS, ONE ANSWER

We will not be discovering America if we say that there is a real construction boom in Azerbaijan. Large scale construction work is under way in all parts of the country. But sometimes people who observe the construction of another beautiful building do not even imagine what risks and difficulties the contractor encounters. As a result, they remain face-to-face with their problems. The deputy director of the AzSigorta insurance company, Xayal Mammadxanli, told us about the possibilities of insuring against the risks of construction.

- Unfortunately, the press often reports on accidents at construction sites, which really horrifies us. No matter how much we regret what happens, the contractor himself has to solve the problem and reimburse losses. But if he insures against his risks, he will not have to deal with the problem on his own. In order to protect people from problems, we have introduced a product called "Complex insurance of construction and assembly risks".

A whole range of incidents might occur during construction or installation work. First of all, the subject of insurance (staff, materials, equipment, installations, property at the construction site, temporary buildings, machines and mechanisms) might sustain damage. Second, damage might be caused to the property and health of a third person as a person covered by insurance implements a project. On the other hand, there might be certain delays in construction or development work and the insured side might sustain damage caused by the loss of planned profit. And finally, the most terrible thing is that staff working on the project might lose their lives, health or work capacity as a result of an accident. The complex insurance of construction and installation risks guarantees against all these risks.

- What accidents can be insured?

- All accidents that are not excluded by the rules of the complex insurance of construction and installation work and the insurance certificate, which happen during the contract period and which result in at least one of the aforesaid losses, are regarded as insured accidents and validate insurance obligations. Such accidents include fire, landslide, explosion, staff negligence and so on.

- How much will businessmen have to spend to buy this guaranteed insurance?

- There are no fixed payments or a price list in insurance relations. Insurance payments are made on the basis of information provided by the insured side on a form which he completes on the insured object, as well as on the nature of the risk. When the insurance fee is calculated, we take account of the amount of the insurance fee, the nature of the project, the sum and term of insurance, franchise sums and other significant factors that might influence the likelihood of an insurance situation. But if we talk about the correlation of rates, this sum accounts for about 0.2-0.5 per cent of the cost of the project. The insurance fee is paid for the period of the validity of the contract and can be paid in cash or by means of one-off or partial payments.

- What period does the contract cover?

- An insurance contract covers the period of construction or installation work, as well as the trial and guarantee periods if there is a relevant provision in the contract. Guaranteed insurance takes effect after construction equipment, materials, machines and mechanisms are delivered to the construction site and the insurance certificate is registered, and expires after construction, the trial and guarantee periods end (if these periods are included in the certificate) and the facility is put into operation (no later than the expiry of the contract). This period can cover one year, 18 or 24 months and even 36 months in some projects.

- And finally, who should be using this insurance product?

- Regardless of the organizational-legal form, any private individual or private entity that carries out construction work on the basis of a contract can use this type of insurance to insure property interests and the life and work capacity of their staff against accidents. Individual parties - suppliers, architects, leasing companies and others - can also insure their work or services.