GK Insurance (GKI) is positioning itself to confront the problem of underinsurance within the construction industry.

This particular challenge was examined at the first annual staging of the GKI Contractors Forum last Wednesday at Jamaica Pegasus in New Kingston. The forum discussing coverage details was conceptualised and staged in order to address the seemingly general misinformation within the industry, especially for the benefit of GKI’s current clients who currently comprise 13 per cent of their total business.

A worrisome trend that has been identified in the market has been the inability of local contractors to properly secure sufficient insurance coverage, as mandated by law, to protect their property and workers for the duration of a project. This has been happening against the backdrop of a boom in the construction business which has seen numerous roadworks taking place as well as new housing and commercial developments springing up across the island’s capital city in the form of shopping centres, residential homes and, even more popularly, apartment complexes.

“I think a lot of contractors buy the insurance to satisfy requirements simply because somebody is asking for it,” said Grace Burnett, managing director of GKI. “What I’m hoping is that they’ll understand that it offers real protection, so they’ll think about it and negotiate with us to help them get the appropriate cover that they’ll need for a particular job.”

Project manager in construction at National Housing Trust (NHT), Dwayne Pryce also expressed that for the numerous developments being undertaken through the government organisation charged with increasing and enhancing the stock of available housing in Jamaica, many of its contractors do not totally comprehend their insurance policies.

“The contractors [are responsible for choosing] the insurance provider, in accordance with the NHT’s criteria,” he explained. “This includes coverage per incident and ensuring that the duration [of the coverage] covers our contract period. Oftentimes, these contractors have no idea of the details about their contracts or their insurance policies.”

This underinsurance proves problematic in the case of eventualities, as there are already gaps such as the lack of personal accident coverage within standard insurance policies locally that leave contractors exposed.

To this end, the GKI’s newest micro-insurance product is now being aimed at those within the growing construction sector, so that workers onsite are protected and can be afforded some coverage in the event of an accident.

This is in addition to their full suite of products that includes bonds for tender, performance, mobilisation/advance payment, and retention, contractors’ risks, public liability, employers’ liability, professional indemnity, and personal accident – which all protect the employer and contractor, workmen and third parties against loss or damage, numerous perils or causes.

The personal accident insurance policy, known as GK Amed, provides reimbursement of up to $300,000 per policy annually to aid in medical expenses the policyholder incurs as a result of an accidental bodily injury or death, with the policyholder being covered for as little as $300 fortnightly or $500 monthly.

GKI micro-insurance officer Candice Williams highlighted that, “in this industry, they’ll have a lot of contractual workers and people that go on and off their site, so the product is actually ideal for contractors since they currently have to go out of pocket for these smaller claims – as they are not covered under larger policies.

“Also, when you have an accident there usually needs to be proof of liability or a lot of documentation along with an investigation – and that takes a lot of time,” she continued. “With GK Amed, we don’t need all of that. They just need to prove they sought medical treatment and it should be in alignment with what they said the accident was.”

With the increased number of construction activities, especially new roadworks taking place within recent years, even more liability claims abound. Neville Henry, general manager of Nationwide Insurance Agents & Consultants which currently serves the insurance arm of the GraceKennedy Group as an intermediary broker along with five other insurance providers in the industry, painted a picture of the current situation.

“There have been a few liability claims; more than usual of late,” he revealed. “I’m not going to say that it’s attributable to just Jamaican contractors, because we have a number of foreign contractors in the country now. The Jamaican contractors, by and large, have been working with very high standards and the experience on the employees’ liability side has been reasonably good over the years.