Maintenance period cover in contractors' all risks
After handover, a CAR policy can follow the works through the contractual defects period, usually twelve months. Maintenance visits or extended maintenance: the second pays for what the construction phase got wrong.
CAR cover ends at taking-over, or at commissioning, section by section. The construction contract does not: the contractor still has to clear the snag list and fix the defects that show up during the defects period, the Defects Notification Period of FIDIC contracts, one year by default, or the one-year completion guarantee under French law. Maintenance period cover extends the policy over that time, so the usual length follows the contract: twelve months, sometimes twenty-four on a wind farm or a bridge. Two wordings are in use. Maintenance visits cover pays only for damage the contractor causes when coming back on site: the worker who punctures a pipe while redoing a joint, the aerial lift that strikes a finished facade. Extended maintenance adds damage that appears during the period but whose cause arose on site before taking-over: a poor weld that fails in the fifth month and floods a basement. For a project owner, the gap between the two is the gap between cover for behavior and cover for construction. The nuance lies in the defect itself. Extended maintenance pays no more than the main policy: if the main policy carries a LEG 2 or DE3 clause, redoing the weld stays with the contractor and only the damage it causes is paid. And the maintenance period never covers operations: a fire in occupied premises after handover belongs to the owner's property policy, and the failure of equipment in service belongs to machinery breakdown. In France, building damage insurance takes over at the end of the completion guarantee year for defects of a ten-year nature.
Textbook case, in numbers. An office building is taken over on March 1 with twelve months of extended maintenance and a 50,000 euro deductible. On August 10, a joint welded during construction fails and floods the basement: 800,000 euros of damage, of which 20,000 to redo the joint itself, excluded by the defects clause. Indemnity: 800,000 - 20,000 - 50,000 = 730,000 euros. With maintenance visits cover only, the cause predates taking-over and no maintenance work is involved: zero, and the contractor answers for the 800,000 from its own funds or its liability cover.
maintenance period, maintenance visits cover, extended maintenance cover, defects liability period cover, maintenance cover
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