Helping hand for small contractors
THEBE Hosken has developed an enviable specialisation in construction insurance which is now being used to facilitate empowerment deals.
In 1976, Thebe Hosken pioneered the concept of principal controlled insurance (PCI) on behalf of Eskom and has since handled all its insurance when it comes to building power stations.
Thebe Hosken director Steve Adams says the brokerage's expertise in this field has been extended to other projects. These include Iscor's KR Plant near Pretoria, the SA Reserve Bank headquarters in Pretoria and the Lesotho Highlands Water Project.
Adams says the PCI concept takes the responsibility of arranging insurance away from small contractors.
The entire project is insured rather than each individual operator. This means that if something goes wrong, it can sorted out quickly and without infighting among contractors, each trying to shift the blame onto the other.
Adams says the challenge now facing government and, to a lesser extent, private developers is how to involve small previously disadvantaged contractors and suppliers in construction projects of all sizes.
"Small firms, for example, have little or no experience in purchasing insurance and certainly do not have the critical mass to do so at cost effective prices. Similarly, the level of excess that would normally be imposed on a small firm may not be viable and could cause it financial embarrassment."
Properly structured PCI takes the burdens away from small to medium companies, allowing them to concentrate on the job in hand.