Aresearch on the Mechanism of Constructional Insurance in Public Facility：the Example of Transportation Department Facilities
Date Issued
2009
Date
2009
Author(s)
Tang, Wen-Pin
Abstract
The government has been allocating a substantial amount of the yearly budget on public infrastructure construction to enhance economic development and expand domestic demand. However, the risk of construction is rising since the scales and funds of the major projects are gradually increasing and the content is also getting more complicated. Therefore, it is necessary to establish an ideal construction insurance system in order to fairly share the cost caused by accidents and smoothly accomplish all the projects. onstruction insurance is currently the main way that owners and contractors use to manage the risk. However, the owner (the construction sponsor agencies) and insured (contractors) have insufficient understanding of construction insurance, so it causes many problems in practice. Furthermore, some dishonorable public servants collude with contractors and insurance companies to falsify insurance policies, deceptively gain benefits and commissions, and resulting in commission of criminal offences.his research examined related literatures, cases of corruption, construction projects operated by Ministry of Transportation and Communications, and interviews with specialists from the government, academia and enterprises. This also revealed the cases of abuse and identified the flaws of current procedures and related laws. In a seminar on “Construction Insurance System and Business Honesty Ethics” held by the Ministry of Transportation and Communications, this research proposed recommendations and renovation plans, which aim to spend less money but have the best effect on risk management. The proposal could be the reference for construction sponsor agencies to manage the risk in the future cases. ublic construction has significant and profound impact on people and society. Thus, the construction insurance is a very important tool to manage the progress, quality and risk of construction. The research shows the potential defects of the current construction insurance system mainly results from faulty regulations, systems, implementation, and supervision. Failure of business to adopt honesty ethics is also the other main reason. To sum up, the recommendations of this research are as follows: (a) Change the method of construction insurance and carry out the “Owner Controlled Insurance Program”; (b) Not calculate the premium by means of listing the separate insured items if the insurance is processed by the contractors; (c) Modify the proportion of insurance premium to total price of construction in accordance with the nature of the construction; (d) Stipulate clearly the insurance coverage and conditions in the construction contracts and examine carefully; (e) Determine the reasonable deductibles; (f) Set the maximum indemnity limit and natural disaster compensation limit; (g) Amend the timing for contractors to submit insurance policy to owners; (h) Insurance contracts should be revised timely according to the possible change of the construction contracts; (i) Revise the current proposed construction insurance premium rates; (j) The Financial Supervisory Commission reinforces the examination of the construction insurance and to perfects the related laws; (k) Private sectors carry out the internal control mechanism, corporate governance and business honesty ethics; (l) Introduce the loss prevention program; (m) Make the proposal to carry out the “Owner Controlled Insurance”.
Subjects
Engineering Insurance
Contractor，s All Risk
Deductible
Premium
Commission
Type
thesis
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ntu-98-P96341002-1.pdf
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