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CONSTRUCTION POLICY

In consideration of the insured agreeing to pay to the company the premium stated in the schedule, the company agrees to provide the insurance set out below.

DEFINITIONS
Wherever these words are used in the policy in bold, this is what they mean. These definitions also apply to any derivatives of the words defined. accidental actual value contract contract site contract works a happening or event which is unexpected and unintended from the insured’s point of view. the value calculated by deducting depreciation for age and use from the new replacement cost of insured property affected. the contract between the principal and the contractor to perform the contract works. the location referred to in the contract at which the contract works are to be completed. the whole of the works, whether temporary or permanent, to be performed by the insured, as described in the contract, which is the subject of this insurance, including all materials and items to be incorporated therein. the period commencing on the date shown in the schedule and finishing: (a) Partial completion with respect to that portion only of the contract works: (i) (ii) at the time a partial practical completion certificate is issued, or at the time that portion of the contract works is occupied, taken over or taken into use by the purchaser, principal or authorised person, whichever is the earlier, or (b) Completion at the time a practical completion certificate is issued, or at the time the contract works are practically complete except for minor omissions and minor defects which do not prevent the contract works from being reasonably capable of being used for their intended purpose, or (iii) at the time the contract works are occupied, taken over or taken into use by the purchaser, principal or authorised person, whichever is the earliest, or Speculative project with respect to any speculative project where there is no agreement to purchase, at the time 95% of the project price has been expended on the contract works and the contract works are made available for public viewing, or (d) Scheduled date on the finishing date shown in the schedule. This date may be extended beyond the date shown in the schedule for the express purpose of completing the contract works, provided the company agrees in writing prior to the finishing date, and the insured agrees to pay any additional premium required, whichever applies first. construction plant tools, plant, equipment, site encampments or hoardings used for the purpose of carrying out the contract works, excluding any plant or equipment forming, or to form, a permanent part of the contract works. NZI, a business division of IAG New Zealand Limited. the amount referred to in the schedule which the company does not insure. the first named person or entity listed in the schedule as insured. the event occurring immediately prior to the loss, and if there is a chain of events, the last event occurring immediately prior to the loss. the person(s) or entity(s) named in the schedule: (a) but only in their capacity as principal or main contractor, and (b) only in their capacity as sub contractor where shown in the schedule for their respective rights and interests. insured property loss the contract works, and any other property shown in the schedule once it becomes the responsibility of the contractor insured accidental physical loss or accidental physical damage (i) (ii)

construction period

(c)

company excess first insured immediately arising insured

CONSTRUCTION POLICY Wording CRI0902

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subterranean fire. occupied or issued with a certificate of partial or practical completion. and (ii) the loss is in respect of insured property included in the calculation of the sum(s) insured. ADDITIONAL ITEMS BASIS OF SETTLEMENT 1. (e) Escalation During Reconstruction being the actual amount by which the costs of reconstruction of the contract works exceed the initial costs. and/or increases in the costs of labour and materials during the construction period. provided they were not in their final position when supplied. the actual value immediately before the loss of the insured property. and hydrothermal activity.B. These Additional Items only apply if shown in the schedule. settlement shall be made on the basis provided for in (b). 3. the cost of repairs necessary to restore the insured property to its condition immediately before the loss. or (b) arises out of the operations of the insured whilst executing work under the Maintenance or Defects Liability Conditions of the contract. the limit of the company’s liability in New Zealand dollars for each Item as stated in the schedule. provided that reconstruction is completed without delay. volcanic eruption. In the event of loss. which is incomplete. (c ) Professional Fees being architects. whichever is the earlier. DEFINITIONS (continued) maintenance period the period commencing when any part of the contract works is put into service. tsunami. earthquake fire. not built. this policy is extended to indemnify costs and expenses necessarily incurred up to the sum insured for each of the following Item(s) shown in the schedule: (a) Principal’s Supplied Materials being materials and items supplied by the principal to the contractor free of charge for inclusion in the contract works. natural disaster proximately caused regions and districts schedule sum insured earthquake shock. the basis of settlement shall be: (a) where the insured damage can be repaired. at the end of the period shown in the schedule. The company will indemnify the insured during the maintenance period for its legal liability to rectify loss to insured property under the Maintenance or Defects Liability Conditions of the contract. and finishing: (i) (ii) at the end of the Maintenance or Defects Liability Period referred to in the contract or. to the extent that: (i) the loss claimed had to be borne by the insured. or (c) occurs to property forming part of the contract works. and prepare the contract works for rectification of the loss. clerk of works and other fees incurred by the insured which are necessary to rectify the loss (but excluding any fees for the preparation of a claim or estimate of fees). (d) Increased Costs During Construction being the costs incurred for variations and fluctuations in the contract price. the area of land in the regions and districts defined in the Department of Survey and Land Information Infomap 319B dated June 1994. PAGE 2 CONSTRUCTION POLICY Wording CRI0902 . demolish and remove the debris. surveyors. the current schedule to this policy issued to the insured. provided the loss is discovered during the maintenance period. (b) where the insured damage is not repairable. the active and efficient cause that sets in motion a chain of events which brings about the loss. INSURING CLAUSES 1. and: (a) arises out of the contract works during the construction period. or upon which work is being carried out for the purpose of completion following issuance of a partial or practical completion certificate. Where the cost of repair equals or exceeds the actual value immediately before the loss of the insured property affected. taken over. DURING THE CONSTRUCTION PERIOD DURING THE MAINTENANCE PERIOD The company will indemnify the insured against loss to insured property occurring at the contract site during the construction period. 2. Where there is a loss covered by 1 or 2 above. (b) Removal of Debris being all costs necessarily incurred to dismantle. consulting engineers.

or natural disaster during any period of 72 consecutive hours will be treated as one event for the purpose of applying the excess. waterborne vessel or craft. However. 10. 11. 2. 4. and shall not extend to other insured property which is affected as a result. express delivery or airfreight. software and other coded instructions for the processing and manipulation of data or the direction and manipulation of such equipment. The company will indemnify the insured by: (a) cash payment. procedure or programme. 4. (c) mechanical or electrical failure. 3. loss immediately arising from total or partial cessation of the contract works. EXCLUSIONS This policy does not insure: 1. evidence of debt. or (d) any aircraft. night work. 9. or the action of normal atmospheric conditions. A series of losses arising from subsidence. unless as a result of other insured loss to a vehicle/mobile plant. specification. deeds. loss arising out of or resulting from rot. promissory notes. corrosion. directly or indirectly caused by. or in connection with a Computer Virus. The excess shall be deducted from each adjusted loss for each event or series of losses from the same event. breakdown. 6. cheques. cash. plan. (if any). work on public holidays. storm. or (ii) part of the structure or contract works directly affected. “Electronic Data” means facts. Ioss to insured property during transit not on the contract site. extra charges for overtime. 5.D. tempest. defect. which is not otherwise excluded. or any part of it. loss to any structure or property already at the contract site before commencement of the contract works. bank notes. securities or money. this exclusion does not apply to resultant loss to other insured property. WHAT YOU ARE INSURED FOR (continued) 2. concepts and information converted to a form useable for communications interpretation or processing by electronic and electromechanical data processing or electronically controlled equipment. or pressure explosion. including (without limitation) penalties for non-completion or delay in completion or non-compliance with contract conditions. loss of files. (d) loss which is a gradual deterioration of the insured property. loss proximately caused by natural disaster. erosion. and incurred solely for the purpose of minimising further loss to the insured property following an insured loss. 12. and any liability arising from this. loss of or damage to Electronic Data. This includes loss of use. 8. (b) under this policy is the TOTAL SUM INSURED shown in the schedule plus GST. mildew fungi or the action of micro organisms. reduction in functionality or any other associated loss or expense in connection with the Electronic Data. loss to: (a) any vehicle. stamps. or (b) replacement. 7. or omission in design. or (c) repair at the company’s option. landslip. account or computer records. sequence. flood. or (ii) wear and tear. CONSTRUCTION POLICY Wording CRI0902 PAGE 3 . disappearance or shortage of insured property where that loss is revealed only by the taking of an inventory or stocktaking. (b) loss to mechanical or electrical items incorporated in the contract works proximately caused by their operation. This exclusion shall be limited to the: (i) item of construction plant. or mechanical or electrical failure. bonds. consequential economic loss of any kind or description. or (e) employees’ personal effects or hand tools. mould. (a) loss proximately caused by: (i) faulty or defective workmanship or material. loss proximately caused by fault. 3. derangement or breakdown of construction plant. bills of exchange. 13. or (c) tyres or tracks. cyclone. or (b) construction plant. unless such charges are reasonable. The most the company will pay: (a) for each Item is the sum insured plus GST. erosion. It includes programs. derangement. inundation.

this policy is extended to include hand tools belonging to the specified employees. expense or liability. requisition or destruction by or under the order of any Government or Public Authority. Where shown in the schedule. or as a result of forcible entry to. or (b) faulty materials. cost. hostilities (whether war is declared or not). OPTIONAL EXTENSIONS NOTE: These extensions apply only when stated in the schedule. unless it is accompanied by violence or threat of violence to any person. 2. or as a result of forcible entry to. prosecution or expense of any type connected in any way with an internal part of a building or structure being wet. civil war. this policy is extended to include loss to plant hired by the main contractor for which the insured is liable under the hire agreement. damp or moist that is caused directly or indirectly by: (a) faulty design or faulty specification. but only while the hand tools are situated at the contract site (irrespective of any policy extension to the contrary). directly or indirectly caused by. act of foreign enemy. Where shown in the schedule. test loading or commissioning. CONSTRUCTION PLANT 4. (b) include loss by theft. EMPLOYEES HAND TOOLS PAGE 4 CONSTRUCTION POLICY Wording CRI0902 . (b) this extension does not include loss by theft. an enclosed building. huts and encampments used for the performance of the contract works. Provided that: (a) the testing and commissioning period does not exceed 14 days for any one item of plant. of any person or group(s) of persons. loss. this policy is extended to include the main contractor’s hoardings. invasion. Where shown in the schedule. Provided that cover under this extension does not: (a) extend to any sub-contractor. insurrection or military or usurped power. including the intention to influence any government and/or to put the public. this policy is extended to include the main contractor’s plant. TEMPORARY BUILDINGS Where shown in the schedule. an enclosed building. by electrical or mechanical breakdown or explosion occurring during testing. ideological. or exit from. religious. 14. (c) ionising radiation or contamination by radioactivity. TESTING AND COMMISSIONING 3. or any section of the public. whether acting alone or on behalf of or in connection with any organisation(s) or government(s).“Computer Virus” means a set of corrupting. liability. ethnic or similar purposes or reasons. loss. or threat of violence to any person. which from its nature or context is done for. rebellion. They do not apply automatically. Exclusion 1(b) is modified accordingly. harmful or otherwise unauthorised instructions or code including a set of maliciously introduced unauthorised instructions or code. including but not limited to the use of force or violence and/or threat thereof. which propagate themselves through a computer system or network of whatsoever nature. in fear. prototype or experimental machinery is not included. This includes but is not limited to "Trojan Horses". procedure or programme. confiscation. including faulty sequence. 1. "Worms" and "Time or Logic Bombs". when it was constructed or altered. (a) war. Further. of any nature whatsoever. 15. site office. and which is being used in the performance of the contract works. (c) extend to mechanical propelled vehicles used off the contract site. Exclusion 9(e) is modified accordingly. equipment and tackle used in the performance of the contract works. or exit from. nationalisation. (b) An Act of Terrorism “Act of Terrorism” means: an act. (with the exception of equipment and mobile plant normally stored in the open) unless it is accompanied by violence. damage. or (c) faulty workmanship. revolution. Provided that: (a) the cover only extends up to the sum insured for each employee. machinery. this policy is extended to include loss to electrical or mechanical plant forming part of the contract works. programmatic or otherwise. (c) cover under this extension does not extend to any sub-contractor’s employees. or in connection with. and (b) second hand. Exclusion 9(b) as it relates to this extension is modified accordingly. or in connection with. political. Provided that cover under this extension does not extend to any sub-contractor’s property.

inter-island ferry. For the purpose of this Extension only: EXCESS In respect of each location at which a loss occurs. (d) take reasonable steps to obtain details of any other person. Exclusion 11 is modified accordingly. The insured shall not: (e) dispose of any insured property which is intended to be the subject of a claim. Waikato. The insured may proceed with repairs. road carriage charges or ordinary costs. this policy is extended to cover the additional costs incurred in rectifying the loss in the most expeditious time. and avoid any further loss. Nelson and Marlborough. Where shown in the schedule. if 1 (a) and (b) above are complied with. Gisborne. (b) take prompt steps to minimise the loss. (f) admit responsibility for any liability or do or say anything which may prejudice the company’s ability to defend a claim against the insured or pursue recovery under subrogation. rail. provided that the airfreight carriage is by a recognised regular scheduled airline service and not carriage by an aircraft chartered for that purpose. (d) preserve the parts affected and make them available for inspection to the company. receipts. (c) if criminal offending is suspected. property or vehicle involved. (f) provide any other information or assistance the company reasonably requires to process the claim. Hawkes Bay. The company will not be liable to make any payment under this policy unless the insured has produced to the reasonable satisfaction of the company accounts. invoices. Where shown in the schedule. Auckland. Exclusion 10 is modified accordingly. and (b) express delivery and airfreight within New Zealand Provided however the company will not pay more than 30% of ordinary labour. Taranaki. Area (B) The regions of Bay of Plenty. and any witnesses. but excluding any damage for which compensation is payable under any Act of Parliament. NATURAL DISASTER CLAIMS CONDITIONS 1. OVERSEAS AIRFREIGHT EXPENSES 7. EXPEDITING EXPENSES Where shown in the schedule. without prejudice to the company’s liability under the policy. Exclusion 12 shall not apply. or containerised shipping between New Zealand ports. Area (C) The regions of Wellington. NOTIFICATION If the insured suffers any loss likely to give rise to a claim under this policy: The insured shall at its expense: (a) immediately notify the company by fax or by telephone. shall be deducted from each adjusted loss: Area (A) The regions of Northland. the insured shall: (a) complete in full the company’s Claim Form as soon as practicable after the loss. Where shown in the schedule. (b) provide free access to examine and assess any loss. Tasman. (e) forward any letter of demand or court documents to the company immediately. Otago and Southland and the districts of Timaru and Waimate. HOW TO CLAIM CONSTRUCTION POLICY Wording CRI0902 PAGE 5 . and (b) transit within New Zealand by road. Wanganui. (c) authorise the disclosure of the insured’s personal information held by other parties relating to the claim. this policy is extended to include loss caused by natural disaster. If the insured wishes to make a claim under this policy. the excess for each Area. including: (a) the cost of penal rates of pay. REPAIRS 3. this policy is extended to include the cost of airfreight charges necessarily and reasonably incurred in rectifying the loss. West Coast and Canterbury excluding the districts of Timaru and Waimate. 6. Manawatu. TRANSIT 8. this policy is extended to include loss of insured property during: (a) storage at other than the contract site.5. airfreight. breakdown of 2. Exclusion 10 is modified accordingly. lay a complaint with the police.

this policy shall be voidable at the option of the company from the date the insured knew. defend or settle. The conditions and exclusions in this policy are subject to the insured’s rights set out in the Insurance Law Reform Acts. (ii) submit to cross-examination under oath by any person the company nominates 4. Any such payment shall. After the company has accepted a claim either in whole or in part. and (ii) any Claim Form. at the company’s expense. INTERESTED PARTIES PAGE 6 CONSTRUCTION POLICY Wording CRI0902 . or indicating that repairs have been effected or replacement has taken place. SUBROGATION 6. ONE CONTRACT This policy wording and the schedule and any endorsements shall be read together as one contract. that person also complies with the same terms and conditions of the policy where applicable. unless agreed to by the company. INSURANCE LAW REFORM ACTS CHANGE IN CIRCUMSTANCE 4. at its expense. as the company sees fit. to act in the insured’s name and on the insured’s behalf to negotiate. At the time of loss the insured shall immediately give notice to the company of any other policy of insurance covering the insured property. and (b) the statements and answers in the: (i) Application. The law of New Zealand shall apply to any dispute about this policy and the New Zealand Courts shall have exclusive jurisdiction. pay part or all of any claim to that party up to the limit of its loss. 5. discharge the company’s obligations under the policy. The insured authorises disclosure of information about this policy to any party whose interest is noted by the company. Unless stated otherwise. The Application and other information submitted shall be incorporated in the contract. DISPUTES GENERAL CONDITIONS 1. If at the time any claim arises under this policy there is any other insurance covering the insured for the same loss. are true and correct. 2. any liability the insured is facing. the company shall be fully subrogated to the position of the insured and shall be able to exercise for its own benefit any legal right of recovery held by the insured. The insured shall not release any third party from liability that could arise from loss covered by this policy. any party whose interest in the insured property is noted by the company shall not be an insured under this policy. The insured shall. If the company receives written advice of any mortgage or security over any insured property under this policy the company may. (g) if requested by the company: (i) provide a statutory declaration to verify the loss. The company shall then be entitled to adjust the premium and/or the terms of this policy with immediate effect. (a) The insured shall give immediate written notice to the company of any change in circumstance since inception of the policy which materially increases the risk of a claim. of the change in circumstance. at its option. It shall be a condition precedent to the company’s liability under this policy that: (a) the insured has complied with all the terms of the policy. whether arranged by the insured or not. the company has the sole right. to that extent. 5. or ought to have known.costings and other documentation supporting amounts expended. and (c) if the policy covers the interests of any person other than the insured. (b) if the insured fails to comply with this obligation. OTHER INSURANCE 6. the company shall only pay over and above the sum payable under that other insurance. CONTROL OF CLAIM After the company has accepted a claim. and (iii) any notice of change in circumstance or given separately in support of any of them (whether by any one of the insureds or any other person). fully co-operate in the enforcement of this right by the company. OBSERVANCE 3.

and b) negotiate all claim settlements with. MULTIPLE INSUREDS CONSTRUCTION POLICY Underwritten by NZI.nzi. customs duties (excluding GST). defect or danger is identified by the company. REASONABLE CARE 10. the sum insured is reduced by that amount. wages. INSURED’S OBLIGATIONS (a) The insured must: (i) insure the contract works for its full value.nz CONSTRUCTION POLICY Wording 06/04 NZ726/3 CRI0902 PAGE 7 . (b) if 7(a) above is not complied with and any values or sums insured. procedures. the company shall: a) send all notices to the last known address of. (iii) declare in the Application whether cover for the anticipated inflationary effect on the cost of the contract works during the period of this insurance is required. (ii) declare in the Application the value of principal’s supplied materials which form part of the project that have not been included in the contract works price. KINDLY RETURN IT AT ONCE TO YOUR BROKER OR AGENT OR TO OUR OFFICE OF ISSUE.co. www.7. and c) pay all claim proceeds to. REINSTATEMENT OF SUM INSURED 11. systems or sequences of work. Where the insured consists of more than one person or entity. 8. the first insured. where any deficiency. Average shall apply and the claim payment for a partial loss shall reduce by the same percentage which the amount of any understatement bears to that which should have been stated The Insured shall at its own expense: (a) comply with all reasonable directions of the company to prevent loss. The value declared for this Item shall be the new replacement value of all the materials and items supplied. inclusive of all items and materials for their new replacement value including freight. When the company pays for a loss. (b) comply with the contract conditions and specifications as they relate to methods. and subcontractors’ work. a business division of IAG New Zealand Limited IMPORTANT: PLEASE EXAMINE THIS POLICY AND IF IT DOES NOT MEET YOUR REQUIREMENTS. PRECAUTIONS 9. or the broker / agent of. provided the insured agrees to pay the additional premium required. The company will add that amount back onto the sum insured to give the insured the full sum insured again after the loss. are understated. The insured (and any employees) shall at their own expense take all reasonable precautions to prevent loss.