Annual policy is generally issued on a Contract Commenced basis. Cover will only be provided for works actually commenced during the policy period. Another method of issuing an Annual policy is on a Turnover basis. Under both the methods contract works that have already commenced before the inception of the policy will not be covered unless by arrangement but work commenced during the currency of the policy remains covered until completion.

Cover under "Floater Policy” is normally automatic for all work commenced by the Insured during policy period. Such policies are usually acceptable where risks are of a similar nature and as such, can be rated across the board and be clearly stated in the policy e.g. construction, alterations, additions, extensions of dwellings, flats, units, commercial buildings and industrial buildings. However, Annual Policies for most types of operations can be considered depending upon the requirements of the contractors. Floater covers are beneficial to the insured and the insurer for reasons like:

  • Well spread risks
  • Cost effectiveness
  • Minimum administration.

Structuring of Floater Covers

Investigation / Clarification/ Discussion

The first step towards designing such a cover requires specific requirements of the contractor, needs assessment, careful clarification and consideration. This is a major milestone to ensure that conceptual clarity is achieved, which is essential for smooth and economical handling of the cover.

The Form of the Cover

On a Turnover Basis?

Although used regularly for larger building contractors, this method is ideal where the Insured's contracts are of small or medium size, are usually of a similar nature with no great fluctuations in the insured periods and where, consequently, a larger number of contacts are executed during a year.

On an Individual Declaration basis?

Individual declarations must be made before the contract works commence where such projects are of a large size. Monthly, Quarterly or annual declarations may be appropriate for CAR and EAR where a larger number of contracts are carried out.

What is the standard process for premium payments?

Except as in individual contract declaration policies, a deposit is made by the insured at the commencement of the policy. The deposit will be adjusted on a date to be fixed, usually within 30 days of expiry of the period of insurance.

The premium must be paid against each declaration where individual contract declarations are to be made.

For Further Information Contact:

Anil Varma

Director & President


+91-22-6655 8858