Contract Works Insurance
Designed to protect your contracted/construction works against significant risks before, during, and after completion.
What is contract works insurance?
Contract works insurance, sometimes referred to as builders insurance, is designed for contracted builders, owner builders, construction businesses, building contractors and sub-contractors to protect property that is undergoing construction, major or minor works, renovation, additions or alterations.
There are two types of contract works insurance available; an annual policy which covers all your construction projects for the year, or a single policy that covers you for a specific project.
Insured events and items may include
Projects undertaken by builders, owner builders, contractors, financiers, or all parties to a contract that is agreed to prior to policy commencement.
New constructions or alterations and additions
All phases of work - preparation, construction period, maintenance period, testing and commissioning
Loss or damage to existing structures under an insured’s care, when requested
Loss or damage as a consequence of defective materials, workmanship or defective design, plan or specification (but not the defective material, work, item or part itself)
Escalation/variations cost
Projects of any value: up to $100,000,000 total sum insured from owner-builders to commercial firms
Associated costs that result from loss or damage such as demolition and removal of debris, professional fees and others
Further sums insured are also available for expediting expenses, contractor’s plant and machinery, tools and equipment and temporary site infrastructure
Products liability for sale or supply of products or the completed operations (annual, multiple project policies only)
Construction and non-construction activities (a single policy can cover both)
Special risks such as vibration and removal of weakening supports
Up to $50,000,000 limit of liability
Policies can cover on-site material damage and Public and Products liability
It’s important to note that some insurers include cover for tools in their contract works policies, some may limit this to cover whilst on site, while others may cover both on and off site.
In addition, some insurers offer the public liability as a separate cover on top of material damage. It’s important that you speak with your insurance broker regarding your coverage needs and refer to all necessary policy documentation.
Exclusions may apply, these could include but are not limited to; loss after work has finished for more than the number of days specified in the policy, consequential loss, cost of correcting defective workmanship, work underground or in water unless specifically agreed by the insurer, fines penalties, liquidated damages or aggravated damages in relation to construction amongst others.
Understanding Contract Works Insurance
Contract Works Insurance is often arranged by licensed builders, construction businesses, owner-builders, or subcontractors responsible for the project. It is relevant for anyone engaged in construction or renovation work where property and liability exposure exists during the build.
The cost of Contract Works Insurance varies depending on the total project value, location, type of work, level of cover selected, and duration of the construction. Whether a one-off policy or an annual project cover, premiums are influenced by scope, materials used, and site conditions.
To make a claim, contact your NQIB broker to notify them of the incident and lodge the necessary documentation. This may include site reports, photos, contractor statements, and invoices. Your broker will work with the insurer to manage the process efficiently.
Contract Works Insurance is commonly paired with:
- Public Liability Insurance
- Machinery Breakdown Insurance
- Management Liability Insurance
General information is no substitute for professional insurance advice. Speak to your broker about the type of contract/constructions works required to support your building activities.
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