Insurance firms plan political risk cover for builders

Through its Property Supply Strategy, Housing Finance is partnering with developers, land owners, professional service providers and producers of construction materials thereby eliminating additional costs associated with dealing with multiple parties.

Ms Macharia reckons that the new insurance cover will reduce the risks across the supply chain, which is expected to ultimately lower the final cost of construction hence final prices for units.

According to Mr Ireri, the insurance cover will remove front load charges on development projects, subsequently lowering the final cost of construction.

Building materials

There is substantial risk in property development, ranging from sourcing of building materials to the completion of a project.

Any losses arising from exposure to risk are often overheads that may not have been budgeted for in the initial plan, adding up to the final cost .

Ms Macharia, said this additional cost is eventually passed over to the final buyer hence the prevailing high market prices.

“Property prices include uncertainties in costs that developers may incur. A cover that takes care of all the eventualities that might delay the project would result in substantial savings for property developers,” said Ms Macharia.