Owner is required to carry builder's risk insurance because ...?

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Yuan Ma

January 07, 2023 16:36

This question appeared in multiple sections in PPI2PASS. I am not able to comprehend what D means. Why is A not right? The explanation is not very helpful. 

 

 

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  Haytham Abdelrahman Abdelall January 07, 2023 16:52

  Ultimately the owner will operate the building and he should have all risk insurance against the portion the GC transfer the rights to him after every certificate payment.

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  Sara Mirza January 07, 2023 19:29

  Hi Yuan

  I guess by referring the answer to A201, it tells us that neither in B101(Owner/ Architect) nor in A101(owner/Contractor) agreement noting has been said about this owner insurance obligation so the A & B can not be the answer. D is telling that because the owner is the one who owns the project and all the title at the end of the day, after all his payments, will be in his name. The insurance for possible future needs should be in his name too. Because if it was the contractor's insurance he may not have anything to do with the construction by the time insurance is needed. 

  Hope I am right otherwise someone corrects me. Thank you!

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  Yuan Ma January 08, 2023 13:18

  Hi Sara,

  Thank you for the answer! I think your explanation about D does make sense. I searched the AIA documents carefully. A201 does say that the owner should carry liability insurance, but does not specify "all-risk insurance". But A101 Exhibit A does specify that the owner should carry all risk insurance.

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  Dzhulia Dimitrova-Blazheva January 13, 2023 03:33

  Yuan

  Where do you have these questions from.

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  Yuan Ma January 19, 2023 02:43

  Hi Dzhulia,

  These questions are from PPI2PASS. I find them very helpful.

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