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.