Constructional Works Cover
Insuring risks in connection with constructional works
Insuring typical risks related to constructional works abroad
You wish to protect yourself against the typical risks related to your construction business abroad? That is possible with a Constructional Works Guarantee. You can insure numerous risks with different cover options of constructional works cover – for example the confiscation or destruction of equipment and the related spare parts due to political reasons or the unacceptability of performing the constructional works contract due to the occurrence of political risks such as e.g. war.
Good to know: You will receive a premium indication in the course of the online application procedure, i.e. before submitting a formal application for cover.
Constructional works cover at a glance
Target group
German building contractors
Insurable risks
Constructional works cover offers protection against the following causes of loss
- non-payment of the amounts owing under a supplies/services contract due to insolvency of the foreign buyer or his failure to make payment within 6 months after due date (protracted default) or because of warlike events or adverse measures taken by foreign governments
- risk of fair or unfair calling of a contract bond due to political reasons or, in absence of political reasons, risk of unenforceability of the claim to reimbursement of the guaranteed amount
- unacceptability of performing the constructional works contract due to the occurrence of political risks (e.g. war) or commercial risks abroad (e.g. insolvency of the buyer), in view of the costs accruing in connection with the setting up of the construction site as well as the storage of construction site equipment and material
- confiscation or destruction of construction equipment and the related spare parts due to political reasons
Cover options
- Constructional works cover on near cash terms (CW cover)
Suitable for constructional works contracts where the entire amount receivable will be paid continuously on the basis of progress reports. Without any additional premium being charged cover for contract bonds which must be provided by the building contractor, with the exception of the bid bond (see contract bond cover) and cover of installation/construction equipment (equipment cover) are included. - Constructional works cover on credit terms
The rules for supplier credit cover apply. - Supplemental Cover
Additional cover of the following risks is available:- Construction equipment storage cover
- Spare parts stockpiling cover
- Site erection cost cover
- Stockpiling cost cover
- Separate construction equipment cover (for a single construction site)
- Global construction equipment cover
- Contract bond cover (in connection with CW cover for bid bonds only since cover of all other contract bonds is already included)
- Cover under a maximum exposure limit for receivables due from supplementary services performed under constructional works contracts after conclusion of contract
Premium
An individually calculated percentage depending on the form of cover as well as specific administrative fees.
Uninsured portion
Specific arrangements for each form of cover
Constructional works cover: Your advantages at a glance
Comprehensive cover
Our constructional work cover offers various options in order to cover numerous risks related to a constructional works contract.
Digital
You can apply for constructional works cover quite easily in our customer portal myAGA.
Combinable
Constructional works cover can be combined with many other forms of cover – for example contract bond cover – in order to improve the protection against risks.
How does constructional works cover work?
A constructional Works Guarantee covers the typical risks arising in connection with the performance of construction contracts abroad. These include, for example, a default on payment due to the insolvency of the foreign buyer or failure to make payment within six months (protracted default) as well as adverse measures taken by foreign governments and warlike events abroad. Besides, cover also extends to the unacceptability of performing the constructional works contract due to political events (e.g. war) or commercial risks abroad (e.g. insolvency of the buyer), in view of the cost accruing in connection with the setting up of the construction site as well as the storage of construction site equipment and material. Constructional works cover can be combined with various other forms of cover and thus adapted to the specific risks involved in the performance of constructional works contracts abroad.
Applying for constructional works cover
You can apply quite easily for the product online in the myAGA customer portal. Please submit your digital application there in order to apply for cover for your export transaction under a Constructional Works Guarantee. For this purpose please register once and comfortably with just a few steps in our myAGA customer portal. If you already use myAGA you can log on directly with your access data.
If you need assistance with the application or if you have any questions regarding the appropriate product, please do not hesitate to contact our business consultants.
Downloads
FAQs constructional works cover
What risks are covered?
Constructional works cover offers protection against the following causes of loss:
- Non-payment of the amounts owing under supplies/services contracts due to insolvency of the foreign buyer or his failure to make payment within 6 months after the due date (protracted default) or because of warlike events or adverse measures taken by foreign governments
- Risk of fair or unfair calling of a contract bond due to political reasons or, in the absence of political reasons, risk of unenforceability of the claim to reimbursement of the guaranteed amount
- Unacceptability of performing the constructional works contract due to the occurrence of political risks (e.g. war) or commercial risks abroad (e.g. insolvency of the buyer), in view of the costs accruing in connection with the setting up of the construction site as well as the storage of construction site equipment and material
- Confiscation or destruction of construction equipment and the related spare parts due to political reasons
Can constructional works cover be combined with other types of cover?
CW cover can be combined with other types of cover, e.g. contract bond cover in respect of a bid bond.
What supplemental cover is available in connection with constructional works cover?
Regardless of the method chosen for repayment of the amounts owing under the constructional works contract, the building contractor can receive additional protection by separately insuring the following risks (modular system):
- the costs connected with the setting up of the construction site (site erection cost cover)
- the costs represented by the construction material and components stored on the construction site (stockpiling cost cover)
- storage of spare parts (spare parts stockpiling cover)
- in cases where construction equipment is put in storage for future use after a building project has been completed (construction equipment storage cover)
- costs incurred for any supplementary services which could not be foreseen when the constructional works contract was concluded but arose while the construction work was performed (maximum exposure limit for receivables due for supplementary services).
In the event that cover is not accepted or requested for the amounts owing under the constructional works contract, the construction equipment can be covered by themselves (stand-alone construction equipment cover). The building contractor can also insure construction equipment which is to be used on several different sites within one country (global construction equipment cover).
Premium will be charged separately for these types of cover; a standard uninsured percentage of 5% applies.
Can constructional works cover be used for refinancing purposes?
The claims arising under the cover policy may – together with the amounts owing for the constructional works – be assigned to banks and forfaiting houses for refinancing purposes.
Do you have any additional questions regarding constructional works cover?
Our experts will be pleased to answer any questions regarding constructional works cover and will guide you step by step through the application process if desired. Please do not hesitate to contact them.
