As a professional, I understand the importance of incorporating keywords and phrases that will help boost your website`s visibility on search engines. That`s why I`m here to provide you with an article on a topic that could help drive traffic to your website – the contract price insurance clause.
What is a contract price insurance clause?
A contract price insurance clause is a provision included in a construction contract that provides coverage for the owner in case of a price escalation. It protects the owner from unexpected costs that could occur during the construction process due to factors outside of their control. Examples of these factors include an increase in material costs, labor costs, or regulatory changes.
How does it work?
The insurance policy will cover the difference between the original contract price and the final cost of the project, up to a specified limit. For example, if the original contract price is $1 million, and the final cost of the project ends up being $1.2 million, the insurance policy will cover the $200,000 difference. The specific terms of the coverage will vary depending on the insurance carrier and the contract.
Why is it beneficial?
A contract price insurance clause provides peace of mind for both the owner and the contractor. For the owner, it ensures that unexpected costs will not cause the project to go over budget. For the contractor, it provides assurance that they will not be held responsible for price escalation beyond their control and can complete the project without worrying about facing legal troubles.
Additionally, having a contract price insurance clause could make your company more attractive to potential clients. It demonstrates that your company is willing to take on the risk and provides an added layer of protection for the owner.
The inclusion of a contract price insurance clause in a construction contract can provide protection for both the owner and the contractor. It provides coverage for unexpected price escalation, which can help keep the project on budget, and provides peace of mind for all parties involved. If you`re a contractor or owner considering incorporating a contract price insurance clause, be sure to consult with an experienced insurance professional to understand the specific terms and conditions of the policy.