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Insurance solutions for the construction and property industry

PROTECTION FOR FINANCIAL LEVERAGE. A VERY SENSITIVE TOPIC BUT ONE THAT CANNOT BE OVERLOOKED

 Food for thought…

When the average person takes a mortgage from a bank they are required to arrange mortgage protection insurance. Such insurance provides life assurance cover in the event of the death of one of the borrowers so that the loan is fully repaid, thereby avoiding the need for the bank to foreclose and sell the property. Buildings insurance is also a part of the mortgage protection insurance demanded by the bank.

Unlike home mortgages, when a property developer, contractor or controlling owner in a company takes bank credit or any other type of loan to invest in a project, there is usually no insurance or protection in the event of the death of the borrower, and in such a case the bank, that may have a charge on the private assets of the borrower such as the private home of the borrower who is no longer alive, or other assets such as cash, motor vehicles and savings – will want to sell these securities in order to cover the loan.

No insurance policy can fully cover such eventualities and certainly not any type of general insurance policy such as a Contractors All Risks insurance policy or other property insurance policy. The grim reality is that the private assets of the borrower, their partners and family members are therefore at risk.
 

Protections for financial leverage are designed precisely for this reason

 
 

The importance of this type of insurance is not only to protect the family of the borrower.
What happens if a controlling owner or a key man in a partnership – whose unfortunate death leads to collapse of the company and the projects it is in the middle of executing collapse like a pack of cards?
Protection against foreclosure of assets which have been put up as collateral against taking a loan, including private assets, is a major issue in the construction and property investment industry which is highly dependent on financial leverage.

 

The responses we have received when we outline the risks of taking a loan of millions or tens of millions of Shekels have been: “Wow….I never imagined….” or “It’s fortunate that you thought of it and told me…” or “I can’t imagine how we didn’t think of it – we thought we had taken everything into account although it turns out that there’s a major loophole that could ruin us”…
 

Up until now, every property developer we have offered protections for financial leverage has snapped up the offer on the spot!
 

Contact us, and together we shall ascertain the extent of your financial obligations and the collateral you have given the bank to obtain credit or financing for a project.

Based on the sum total of your liabilities we can formulate a financial leverage protection mechanism that will provide you, your partners and your family with significant cash-flow to assist you to recover financially in an unfortunate eventuality and ensure that your family, partners and business will not be affected, your property will not be sold by the bank and that the courts will not appoint an insolvency administrator for your projects.

 
 

Protections for financial leverage are first and foremost designed for property developers, contractors, controlling owners and partners in ventures investing in real estate projects which are largely funded by bank credit. In the majority of cases, such loans involve substantial amounts of money which are secured by collateral including private assets. For you, your family and your partners – protection for financial leverage gives you peace of mind.
 
 

There is a very close connection between protections for financial leverage and construction insurance for energy facilities and solar fields. Projects of this type involve colossal amounts of money, much of which comes from bank credit. Secondly, projects of this type are exposed to natural catastrophes that can cause severe damages which can interrupt the project or even ruin it completely, in addition to the other reasons we have mentioned above.
 
 

National Outline Plan 38 projects are some of the most complexed and intricate projects to handle due to the high risk of insurance claims. Events such as damage to neighbouring properties and damage to the existing building whilst foundations are being laid, to name a few, have the potential to lead to financial ruin for the contractor. Therefore, protections for financial leverage are a mechanism that reinforces your financial foundations and provides security to your family…
 
 

PROTECTION FOR FINANCIAL LEVERAGE


Protection for financial leverage is a very sensitive topic since there are certain eventualities that we prefer not to think about even though it would be a mistake not to consider them and plan for them accordingly.
 
 
 
 

For information or details about the type of insurance required, 
please fill out the form and we will contact you shortly

 

Do you need Contractors All Risks Insurance?

Call us on 972-3-6951414
contact us by e-mail:
itzick@simon-ins.co.il
or complete the form and we will contact
you as soon as possible.

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Please contact me directly
Itzick Simon
972-50-5299480