Question

Identify the instance when the coverage 'automatically' ceases under the form:

a) Change in Building Codes
b) Project Delay
c) Project Completion
d) Subcontractor Default

Answer 1

Coverage under a construction insurance policy generally ceases 'automatically' upon Project Completion. Other scenarios listed like Change in Building Codes, Project Delay, or Subcontractor Default do not automatically terminate the coverage.

Step-by-step explanation:

The instance when the coverage 'automatically' ceases under the form is c) Project Completion. Coverage under a construction or contractor insurance policy typically ends when the project is deemed complete. This can be a formal process where an official completion document is issued, or it could be at a point where the work has been completed to the satisfaction of the client and all parties agree that the work is done. Once a project is completed, the risk profile changes significantly, which is why coverage ceases. In contrast, a Change in Building Codes, Project Delay, or Subcontractor Default do not automatically end the coverage, though they might affect the terms or conditions of a policy or may require an adjustment or additional coverage.