Enhancing Construction Underwriting Expertise, Tugure Prepares to Support Project Growth

Jakarta - As the Indonesian government accelerates development in various regions, construction plays a vital role in supporting sustainable infrastructure growth.

This necessitates a deep understanding of assessing acceptable risks for insurance companies and determining the premium that policyholders need to pay each period, a process known as underwriting.

During a presentation at the Sharing Session with MSIG Indonesia, held in collaboration with Tugure Academy in Jakarta on Friday (7/5/2024), Aries Karyadi, Group Head of Property & Energy at PT Tugu Reasuransi Indonesia (Tugure), emphasized the need for refining and deepening construction underwriting, especially for high-risk projects.

Aries explained that Tugure is prepared to support infrastructure development by providing reinsurance in cases of construction-related accidents. This aims to offer comprehensive coverage for losses or damages to contract works, equipment, and construction site facilities.

“By understanding the underwriting process, we can better prepare before applying for insurance, helping both insurers and insured parties avoid disputes in the future,” he stated.

He also highlighted that every construction project, especially large-scale ones, typically has a Construction All Risk (CAR) policy. CAR insurance protects project capital and includes responsibilities of project owners and contractors, covering third-party or public losses resulting from construction activities.

Aries underscored that individuals under the insured’s supervision should be classified as first-party, not third-party.

“If there are non-residents who act as extensions of the contractor, they should be considered first-party, as they are on site with the contractor’s permission and are carrying permitted equipment. Thus, they fall under the contractor’s supervision,” he said.

However, Aries noted that if such a worker is classified as a third-party once they enter the production site, they are regarded as a trespasser without relevant access.

During the same session, Romy Alfisyahri Dalimunthe, a Property & Engineering Underwriter at Tugure, explained that CAR policies also cover damages to properties located on or adjacent to the construction site.

“This coverage protects existing properties that are heavily impacted by the construction work, allowing them to be included in the CAR policy,” Romy added.

This approach ensures that if existing property incurs losses due to construction errors, they will be covered.

Attended by 160 participants, this event was part of Tugure's regular thematic discussion sessions held with business partners.