2/5/2014
Insurances
INSURAN DAN BON
PELAKSANAAN
Insurance Against Personal
Injuries and Damage to Property
Clause 15 - Obligation of the Contractor
to effect and maintain insurances
Also known as Public Liability
requires that, if their activities
loss or damage to another,
be available to pay compen
lnsur.ance Against Personal Injuries and
Damage to Property
Workmen Compensation
Employees Social Security
Insurances of Works
Insurance Against Personal
Injuries and Damage to Property
compulsory form of insurance for those at risk
of being sued by third parties for negligence
Construction may have activities
the potential to affect third parties
of the public, visitors, trespassers, su ..1~r"'
contractors, etc. who may be physica
injured or whose property may be dq_r!!1JleO,.~lf)"
or both).
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Insurance Against Personal
Injuries and Damage to Property
Must be effected before the commencement
of any works
Covers the construction period
DLP period { CP + DLP +.t1
(It~\
Insurances value depends onth-e~riS'RS1~lY!
exposure of the premises and
In JKR, the value is predeterm
contract amount
Insurance Against Personal
Injuries and Damage to Property
The Contractor shall renew and extend the
insurance cover as required
Clause 15.3 - permit the SO to
insurance if the Contractor fail to
Government may recover the pre
any monies due to the Contractor
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Insurance Against Personal
Injuries and Damage to Property
Requires that the insurance be effected in the
joint names of Government and the
Contractor
Must be stepped down to ; and
the sub contractor
Government covered with respects to
specified clauses, but not any
negligence by Govn, SO and ~~~Js
Workmen Compensation (WC)
Clause 16.1 -Contractor's liability to
indemnify the Government on claims
made pursuant to Employees
Security Acts 1969
is a form of insurance that pro\Jirtf~~"'
compensation for employees
injured/killed in the course
employment
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Employees Social Security Act

Workmen Compensation (WC)
Obligation of the Contractor to effect
and maintain insurances
Policies must be deposited with
the Contractor must maintain
Covers the construction period .,,.,........,..,
whole DLP period
Insurance value - Depends on
degree of risks involved (
works, site conditions,
1969 (SOCSO)
Clause 17 - The Contractor shall submit
the SOCSO Code Number and shall
pay contributions until compl
Contract
Must be maintained throughtout
contract inc! DLP
if Contractor fail- as in WC
17.3)

Insurance of Works Insurance of Works

Clause 36 (a) -The Contractor required
to procure insurance against loss and
damages to the works and
materials brought to site.
Joint name with Government
Insurance value - full value of works
(contract sum) and plus further value if
specified
Shall maintain for the whole
;.;.;..;..::.:..;:_~~~

period ( CP)
Against fire, lightning, explosion, .~r""'tlr"" ~

flood, riot, etc

Theft and vandalism not inc~Wefd

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Insurance of Works Insurance of Works

Application of insurance monies;
Clausa 18 - The Contractor shall renew
-'Occurrence of loss, Contractor shall restore the
damaged works
required -'The monies will be paid by insu
Clause 18.2- permit the SO to Government

any insurance if the Contractor

so. Government may recover
premiums from any monies
Contractor

Contractor's All Risks - CAR

Performance Bond
Clause 13 - Contractor shall deposit
-
with the Government a performance
bond equal to 5 % of Contract
is a surety bond issued by a
guarantee satisfactory co nl~tinlri~~-(
project by a contractor.

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Surety Bond Surety Bond

A surety bond is a contract among at
least three parties:
The principal - the primary party
be performing a contractual
The obligee - the party who is the
of the obligation, and
The surety - who ensures that th
principal's obligations will be rTAJ:mrrnl'!l'l"llllll
Through this agreement, the surety
agrees to uphold-for the benefit of the
obligee-the contractual prom
(obligations) made by the prin
principal fails to uphold its pro
the obligee.

Performance Bond Performance Guarantee Sum

Can be in the form of 'bond or A sum retained from monies due to
guarantee' by : Contractor until reach the amount of
Bank performance bond (5% of Co
Insurance company Sum)
Finance Institution Retained 10% of amount due to
Or Contractor in the interim
In the form of Performance (Vl.fl>)
Sum

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\
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Performance Bond Performance Bond

Performance bond is required to be Clause 13.5- Performance bond (or
maintained for such period balance) 1ay be released on
PW D - 12 months after Certif completio of defects.
Making Good Defects (CMGD
If Contractor fail , SO may utilis I!Oo~\)~t-r C41"t ~
- bond - make deductions from t lt:::n:><1~~--
bond/sum
. ..... 1-J..id ~