Construction weather parametric policy launched

Zurich North America has launched a parametric insurance policy to cover the financial losses incurred by owners and contractors due to construction project delays caused by severe weather.

In a statement Tuesday, Zurich said the construction weather parametric insurance policy provides coverage for non-physical damage-related project delays that traditional builders risk insurance does not cover.

Maximum limits of up to $10 million are available under the policy, a Zurich spokeswoman said via email.

Unlike builders risk, which requires physical damage to project elements for a claim to be paid, the parametric insurance pays out based on predetermined weather events occurring in the project’s location, such as extreme rain, wind or temperatures, Zurich said.

Parametric policyholders can buy coverage for one or more weather perils, and coverage duration can be tailored to peak season for the weather risk and pegged to milestones in the construction schedule, Zurich said in the statement.

Perils, thresholds, limits, deductibles and coverage duration under the policy can be tailored to meet the individual needs of buyers, and threshold options for each peril are based on historical weather data at the project location.

Coverage responds as long as the trigger event occurs, the project is impacted within the agreed-upon dates and the deductible has been met, Zurich said.