It has been easy for Removal Of Debris (ROD) to be determined by insurers and brokers at 10% of the sum insured for the building. However, it is likely this will not be adequate enough.
The difficulty of building on a particular site is directly related to building’s cost. For example, sites with difficult access or steep slopes are usually more costly to build on. Therefore it should be expected that removing debris from a difficult site will also be more costly. So is a 10% allowance for Removal of Debris enough?
A 10 per cent allowance might not be enough in buildings of comparatively low value where site access is, or later becomes very difficult.
If the building is full of asbestos or hazardous chemicals, the increased costs to clear can be much more than the 10% allowed for.
Whether a site is originally difficult to access or not, it can become far more difficult to access if some parts of the site are blocked by the building works or the excavation carried out on it. For instance, in one claim, Removal of Debris required a large crane to lift debris over an adjacent building. On another site following a large fire, despite a road frontage, nobody had considered that access would be required to the site other than by road. So at considerable cost, a barge was required to transport an excavator to the site to remove the debris.
No doubt for the majority of buildings and sites, a 10 per cent Removal of Debris sub limit should be adequate.
We are responsible for advising on the adequacy of a client’s cover, it is important that we consider the adequacy of a 10 per cent Removal of Debris allowance. Ideally this should be taken into account when a building is valued for its future rebuilding costs. Access issues on the site should be analysed to ensure the sublimit is sufficient to cover the cost of removing the debris following a Fire or other peril from the property surrounding the building and the site.
If you would like to discuss this further, please do not hesitate to call us at CPR Insurance Services. CPR are experts who can save you!