THE IMPACT OF INSURANCE POLICIES TO BUILDING PROJECT CONTRACTS (A CASE STUDY OF IMO STATE, OWERRI)
ABSTRACT
This study was aimed at evaluating the problems that insurance policies come in contact to building projects contract. This may be due to lack of client awareness or others involved in the building project contract and its insurance. This study will determine what impact insurance has to building project contract and what extent it covers in project contract. The study shall also determine how client be it public, individuals or institutions etc. Can insure their building and property. Using data from field survey and activity sampling, the study revealed that generally, most building project and other project contract are not insured effectively in Imo State, from the result of oral interview conducted among key players in the insurance company, this situation was attributed to the financial resources and audience attitude towards response are not okay. Therefore, the research study, that is from the questionnaires and audience response shows that people are not educated on the impact of insurance policy to the building project contract and recommended that the registered insurance company are in better position to enlighten the people on how important it is to insure their, not only property but lives and what steps to follow in doing so.
CHAPTER ONE
1.1 BACKGROUND OF THE STUDY
The insurance policies to building project contract cannot be over emphasized. The term insurance is a cover used for projecting oneself from the risk of a financial loss. In the construction industries, building project contract are contracts that exist and agree between the client and the contractor, therefore, this study shall go a long way to determine the extent to which insurance will cover in building project contract.
The type of contract which one involves itself with can affect him/her in insuring the contract. It chose the Turkey contract system, the contractor can then insure the site, this makes his work more interesting and effective.
In construction period, clients are expected to insure their property, this study also creates awareness of insurance policy to client and other bodies involved in the contract.
Construction sites are inherently dangerous places. This is why construction insurance is an important policy to have if you own, run or manage a construction site. Construction insurance provides safeguards for you as an employer against your construction workers being insured on site. Construction insurance does not exempt one from maintaining a safe work place. Usually construction insurance policies only pay out if a strict set of health and safety guidelines are followed.
1.2 STATEMENT OF THE PROBLEM
The building project contract in cooperation with insurance policy cannot be ignored. In the construction industries there is need for every project contract to be insured. The following points are reasoned for the study
The non-incorporation of insurance policies to building project contract.
The lack of client awareness to building project contract insurance.
The insuring of construction site
The insuring of building and property
The non-compensation towards failure of structures.
1.3 AIMS AND OBJECTIVES
The major aim of this study is to incorporate the insurance policies to building project procurement.
Objective
To determine the level of risk in construction site that needs to be insured.
To analyze the building project construct insurance.
To ascertain the impact of insurance in building projects.
To determine the awareness of client with regards to insurance.
1.4 SIGNIFICANCE OF THE STUDY
The significance of the study indicate that insurance policies create immeasurable awareness to building project contract especially in building project contract, insurance policy ensured that every part of the contract involved are benefited. The following list benefit in building project contract with insurance;
The construction site
The owner of the size (client)
The general public
The area that need more academic pursuit
1.5 RESEARCH QUESTION
What is insurance?
Do insurance policies have impact on building project contract?
What areas do insurance policies cover in building project contract?
Who are involved in insurance policies?
What factors affect insurance policy
Does most erected infrastructure in Nigeria undergoes insurance process.
Most insurance companies are they really registered or not?
1.6 SCOPE OF THE STUDY
The scope of this study focus on identifying the insurance policies to building project contract. In project contract insurance policies, incorporate making sure that all activities on construction site were properly managed.
This determines the extent of insurance policies towards the construction site that need to be insured. The area which the insurance policies cover in building project contract and also some of the factors that could affect the insurance process to building project contracts. The fact that project contract needs to be insured, the client awareness towards the building project contract insurance and also the contractors are all necessary and should be determined properly.
1.7 LIMITATION OF THE STUDY
This study is limited to Owerri, Imo State. The study is also limited by the constraints of time, financial resources and lack of literature materials. In spite of the above limitation and constraints, it would be hoped that the study would achieve the intended aim and objective.
1.8 DEFINITION OF TERMS
INSURANCE POLICY
All law lexicons define insurance policy as a contract whereby, a person called the insurer or assurer, agrees in consideration of money paid to him, called the premium, by another person called the insured or assured, to indemnify the later against loss resulting to him on the happening of certain events.
POLICY
The policy is the document in which is contained the terms of the contract.
Source: Osborne’s Law Dictionary, 4th edition p. 178
INSURANCE
Insurance is the act of purchasing a security risk, the assured, anxious to protect himself against a risk, purchases from the insurer the right to be indemnified if the risk should materialize.
Source: Slater’s Mercantile Law, 14th edition by Lord Chorley and O. C. Giles
CONTRACT
A contract is an agreement between two or more persons enforceable at law.
Source: J. O. Irukwu (1971)
INSURED OR ASSURED
The person who has purchased an insurance policy and is protected by it, sometimes also referred to as the assured.
INSURER
Insurance Company
PERIL
A cause of loss such as fire, earthquake and flood.
Source: Risk Management Division 1st edition effective. March 2007
PREMIUM
An amount of money that you pay once or regularly for
an insurance policy.
Sources: Oxford Advanced Learners Dictionary 6th Edition.
THE IMPACT OF INSURANCE POLICIES TO BUILDING PROJECT CONTRACTS (A CASE STUDY OF IMO STATE, OWERRI)