Insurance Implementation in Malaysian Construction Industry

Sufficient insurance coverage is important to protect an organisation's resources and finance. Insurance companies develop their resources through the insurance premium. The significance of insurance management in the construction industry is to provide security and to increase the chances of gaining back the losses occurred in any contracted incidents. This study aims to get the insight into the insurance application in the Malaysian construction industry. The objectives of the research are to identify the factors that affect the premium price, to study the types of claims arise from construction activities and to identify the claim procedure. Questionnaire surveys have been distributed to eight hundred contractors and thirty insurance companies, and semi-structured interviews were also performed with experts and insurance companies' representatives. It was found that the scope of work and the various types of coverage affect the premium price considerably. Fire, accidents and injuries are the highest types of claim arise in construction. The claim procedure starts from the day the incident happen and ends when the claimant gets paid. Finally, this research gives suggestion on the action that can be implied by the contractors in order to minimise the incidents at site thus can help reducing the claims.