What Does Contract Works Insurance Cover?

When it comes to construction work, it can be hard to know what you’re covered for and what you’re not. Contract works insurance covers a lot more than just damage to your home or building. So, what does contract works insurance cover? Keep reading to find out.

What is contract works insurance?

Contract works insurance is a form of cover used to protect the risks that arise from building, renovating, and improving properties for clients. It’s an essential addition to your business when you’re working on other people’s properties. Contract works insurance is designed to protect both the consumer and the contractor. Let’s break down its different forms, get an understanding of how it’s used and what sort of risks it covers.

What Does a Contract Works Insurance Policy Cover?

Contract works insurance policies are designed to be flexible, so they can be tailored to suit your business needs. You may be able to choose from a range of options such as:

Cover for defective workmanship or materials
Cover for theft, damage, or destruction of property while under construction
Cover for materials in storage offsite and in transit
Cover for existing structures where the contractor has a contractual responsibility to insure them
Payment of any loss or damage that occurs while your clients property is under construction
Contract Works Insurance can also cover work carried out by others. This is important because there are times when you need to hire contractors or sub-contractors to carry out work on your property. If they damage something while they’re working, this type of insurance may cover the cost of repairs or replacements.

We believe it is essential to include all phases of the build in your contract works policy. There are some policies, with smaller price tags, which look good on the surface. However, when you look at the details of the policy, you may find that the insurance only covers the part of the project involving building. While the active building phase of a construction project is the time when most mishaps occur, we believe it is essential that our customers have coverage in place through all three of the stages of the build.

Tender Phase – The time prior to actual construction is subject to hazards and should definitely be included in your contract works insurance. Although this is not a particularly busy time in the construction world, do not allow yourself to be lulled into a false sense of security believing coverage for this phase is not necessary. Inclement weather and unforeseen happenings at the build site can be costly to you and your company.
Construction Phase – Naturally, the most active phase of the build is also the most hazardous. At their best, construction sites can be a labyrinth of potential accidents. At the worst, the sites can be deadly. Even the most conscientious tradie cannot control every aspect of the day-to-day goings on at a construction site. Contract works insurance needs to reflect the tenuous nature of the job site. We believe you should resist the impulse to under-insure yourself merely because you have had no problems in the past.
Post-Completion Phase – It is tempting to feel that once construction is complete, the property is no longer a concern of yours or your company. However, until the purchasing party officially accepts the finished project, or another insurance policy begins, the property is still the contractor’s responsibility. Any number of things can and often do go wrong between the time you consider the work complete and when the new owner gives their approval. It is the safe and prudent thing to review all the insurance policy information and not simply hope for the best.

What is not covered by a contract works insurance policy?

The contract works insurance policy does not cover:

The cost of rectification of any defect in the workmanship or materials.
The cost of rectification of any error or omission in the design, plans or specifications supplied by any party to the contract.
Any loss or damage caused by latent defect.
They also do not cover project management or other overheads that are incurred by your business while carrying out a project.

Get in touch for more information on what may not be covered by contract works insurance.

Do I Need Contract Works Insurance?

If you’re in construction, you probably already know that you need contract works insurance. If your business is involved in building projects, this type of insurance is essential.

If your business involves subcontracting work from other companies, then it’s also important for them to have their own contract works cover so that each party working on the project has their own coverage up in case anything goes wrong during construction or renovation work being done at home or business premises.

Contract works insurance is a great way to protect your project and business. It can help you stay protected against property damage and other unexpected events on site. However, it’s important to know the details of your policy so that you can understand what it covers and how much cover it provides. Contact us today for more information on contract works insurance.