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Contract works insurance

Cover for contract works is there to ensure construction projects are protected. It covers loss or damage to, property that’s being built or altered.

Contract works insurance is an insurance for building contractors, home owners, property developers, electricians, bricklayers, carpenters, plasterers, tilers and other tradespeople.

It is also known as construction insurance, ‘Builders All Risk’ or ‘Contractors All Risk’ insurance.

Contract works insurance financially protects the principal's investment in a capital project. In the case of commercial projects, the principal will be the business owner. In the case of residential properties, it could be the property owner or the developer.

Who should arrange contract works insurance?

Typically, contract works insurance was arranged by the contractors. As construction projects have become more complex, it is now more common for the property owner to arrange contract works insurance. In the event the contractor defaults or closes their business, the principal will then have certainty of cover.

What contract works insurance covers

It is designed to cover work that’s underway and can pay to repair or redo the work in progress if it’s damaged by an insured event like fire, flood, storm, vandalism or theft. This can include the cost of the labour, materials and tools to get the work back to the stage it was at before it was damaged.

Not all eventualities are covered. It won’t cover consequential loss, loss due to delay, penalties, liquidated damages and construction plant, equipment and tools, faulty design, workmanship or materials. Contract works insurance doesn’t cover existing constructions that are on the site. Talk to a broker to understand more about cover options.

When should a contract works insurance policy be arranged?

If you're doing renovations that will alter your building structurally, you are a principal. A separate contract works insurance policy may be required, as alterations or building work pose an increased risk which isn’t covered by standard home insurance or business assets Insurance policies.

For commercial builds, having appropriate insurance cover in place is a requirement of all standard construction contracts and must be in place prior to commencement of the project. Insurance has to be arranged before any access is allowed to the site.

Help with contract works 

It’s important to talk to your broker when you are planning building works to ensure your existing insurance covers your specific risk or whether contract works insurance is needed.

We have specialist brokers for construction insurance who understand all aspects of contract cover and options for insuring your building projects. We can create a tailored insurance policy that covers your construction business, including protection for public and employer’s liability, tool, plant and machinery cover as well as contract works insurance. 

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