A Review on the Practices of Assessment of Construction Works' Claim and Compensation

In the practice of insurance works in the Malaysian construction industry, details of construction works, liability of insurance coverage, risks, losses and compensation entitled for the insured upon the occurrence of insurable risks are specified in Contractor’s All Risk (CAR) policies. Despite the practice of insurance contract for construction works in Malaysia where standard policy and agreement is applied by the parties, the practice of insurance assessment for compensation and reimbursement of construction works loss and damage specifically in Contractor’s All Risks (CAR) Takaful is based and relied on custom company-based or in-house reports by loss adjusters as experts. Hence, this paper seeks to identify current practice in assessing claims for construction works loss and damage in takaful specifically under Contractor’s All Risk (CAR) Takaful. Issues and variety of approaches and methods used by insurers in making assessment for construction works loss and damage are identified through literature review and content analysis. The study provides comprehensive understanding of assessment of loss and damage for construction works and revealed there is lack of standardized industry practice particularly for the assessment of claims for construction works loss and damage due to absence of reliable and published guideline or framework. This paper is
expected to produce a summary of takaful claim assessment methods for construction works loss and damage through synthesis of content analysis based on the review done. The outcome of the study suggest that further research is required in order to develop a standard framework of takaful claim for the assessment of construction works loss and damage in Contractor’s All Risks (CAR) Takaful.