ADJUSTERS INTERNAT IONAL . COM 5 A D J U S T I N G T O D A Y determining a project’s completed value. In the event of a loss, doing so can be a critical mistake. Because these items can commonly represent up to 20 percent of the completed values, omitting them sets the limit at only a portion of the completed value, especially when a coinsurance penalty is also applicable. 3) Leaving out other insurable values, resulting in inadequate insurance. 4) Including items excluded from coverage. Land value is a major item excluded. What should be included, however, is the added value of excavation and landscaping work. Architect’s fees, which can be substantial, should also be considered. Some policies automatically include them, but never assume that this is the case. Reporting Form The reporting form is frequently used by contractors who have numerous jobs going on simultaneously and can be used to insure all of them under a single program of coverage. The policy can be tailored to include automatic coverage for new locations, usually requiring that they be declared within a stated number of days from the start of construction. As noted, determining whether a reporting form will be used is a decision usually left to the underwriter’s discretion. The underwriter will most likely select a limit high enough to cover the expected completed value, with the actual value of the property at risk reported to the insurer regularly. Care must be used with this form to: 1) Submit the reports of value in the timeframe prescribed by the policy, which is usually monthly. Late reporting can result in a penalty because values continue to increase, making a loss between the report due date and the time the report is submitted likely to be underinsured. 2) Compute the monthly or quarterly values carefully and include the value of all covered property — including materials and supplies in place, in storage off-site, in transit, and on premises to be installed. Covered property of contractors, subcontractors and other parties also should be included, to the extent that these items are included in the insurance. Do not overlook the value of leased equipment on the premises for which contractors or subcontractors have responsibility, provided the policy will cover them. The reporting form is frequently used by contractors who have numerous jobs going on simultaneously and can be used to insure all of them under a single program of coverage. “ ”
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