If you are in the construction industry, then you need to know about Contract Works Insurance, particularly if you operate your own business rather than acting as a sub-contractor. Essentially, this type of insurance covers the contractor, subcontractors and any other third parties involved in the project on site, as well as their assets.

Who should apply for Contract Works Insurance?

If you are not sure if this type of insurance is suitable for your business, it’s best to discuss it with your insurance provider. Essentially however, Contract Works Insurance is suitable for owner builders, residential and commercial builders, property developers and civil contractors, as well as landscapers, tilers, electricians, plasterers and project managers. 

Your insurance can cover work on residential and commercial properties, office buildings and unit blocks, schools, hospitals and much more. You can have a one-off policy cover for specific building works or pay for an annual cover, it all depends on your business model.

What does Contract Works Insurance cover?

Contract Works Insurance can cover you through all phases of work, including preparation, construction, maintenance, testing, commissioning, and during new construction, renovations or additions. In short, this type of policy covers you for anything that happens on-site that is out of your control.

  • It can be customised to your individual needs and can cover any of the following:
  • Accidental damage to onsite materials, structures and tools.
  • Loss or damage due to defective materials, designs, plans, specifications or workmanship.
  • Damage due to fire, floods, storms, vandalism or theft.
  • Third party property damage and injuries.
  • Advanced loss of profits.
  • Delay in starting the project.

For example, vandals spray paint the side of a building that has just reached lock up, smash the windows and steal tools left inside the building. A storm rips through the site and a branch crashes through the roof of a new construction, the project is delayed due to large bush fires in the area or a plumber subcontracted to the project cuts through a steel structural beam costing additional time and money to fix.

What doesn’t Contract Works Insurance cover?

Contract Works Insurance doesn’t cover existing structures on the site, so for example, if a cyclone rips through the site and the roof is taken off the property, Contract Works Insurance will pay for the roof of the extension you are building, but for the rest of the roof, the owners home insurance will need to be contacted. There can also be specific types of exclusions, so you need to examine your policy carefully to identify these exclusions and amend it if needed.

What to do if you need Contract Works Insurance

If you work in construction and operate your own business, you might have realised that Contract Works Insurance is something that could be of real benefit to your livelihood. You most probably already have Public Liability Insurance, but since that only covers you for claims made against your business by customers or the public, this leaves you wide open for an expensive future if any of the issues mentioned above occur on-site.

To decide whether Contract Works Insurance is suitable for your business, contact us to talk to an insurance specialist today.

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General Advice Warning

The information provided is to be regarded as general advice. Whilst we may have collected risk information, your personal objectives, needs or financial situations were not taken into account when preparing this information. We recommend that you consider the suitability of this general advice, in respect of your objectives, financial situation and needs before acting on it. You should obtain and consider the relevant product disclosure statement before making any decision to purchase this financial product.

Insurance Advisernet , February 28 2019

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