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What is Contract Works Insurance?

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

Management Liability insurance is designed to provide protection to both the business and its directors or officers for claims of wrongful acts in the management of the business.

A business insurance pack can provide cover for your business premises and contents, against loss, damage, theft or financial loss from an insured interruption to the business.

Purchase up to six products under one Business Insurance Package. 

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 discuss further.

General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.

All information above has been provided by the author.

Gail Findlay, IA South West, AFSL 240549

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