What is Construction and Contract Works Insurance?
If you’re a registered builder or a business providing some form of construction services as part of your business (think shop fitters, landscaping, earthworks, civil construction), chances are you need a Construction Insurance policy.
Also known as a Contract Works Insurance, this type of cover will protect the physical structure as it’s being constructed, the materials and equipment used on-site and your public liability obligations to third parties and contractors.
I already have Public Liability, why do I need Construction Insurance?
Your public liability is only covering damage to third party property and third party injury as a result of your negligence, so damage to the contract site from perils such as fire, storm, wind, water, vandalism and theft for example, would not be covered (unless negligence could be established).
A Construction Insurance policy is usually split into two main sections;
Material Damage Section
This covers material damage as a result of insured perils, to the works on-site, as well as minor/major equipment and tools (if not covered separately, for example under a General Property policy). It includes theft and vandalism, and in some cases (depending on the insurer) will include accidental damage also.
Public Liability Section
Combining your public liability into a Construction Insurance policy makes great sense. A Construction policy is tailored to the occupation and industry and will include additional covers like Vibration and Removal of Support as standard, with much higher limits than you might get (if you can get it) under a public liability cover that is part of a Business Pack for example. Having the liability under the same roof as your construction cover means claims are easier to manage also.
What types of Construction Insurance are there?
These policies are usually arranged as either a single one off policy, for a specific job or contract, OR you can have an annual policy that covers off all contracts for the year.
Single job policy
Handy for one-off jobs, the policy runs for the duration of the contract period until practical completion and is rated on the value of the contract (including materials) and can be taken just for the Material Damage cover, or can include your liability also. These policies do not renew at the end of the policy period unless an extension is required and approved by the insurance company.
Annual renewing policy
This is a great way of managing multiple jobs throughout the year as a once off declaration of jobs completed for the past year and an estimate of jobs for the coming year, which is reviewed with your broker at renewal time. Using an estimated total turnover for the forthcoming year, as well as a total contract value, you can have peace of mind knowing all your jobs for the year are fully insured.
Construction & Contract Works Insurance doesn’t have to be complicated, but you do need to get it right for your operational circumstances. Working with an experienced broker, means you can trust you’re fully protected.
This article originally appeared on MeyerInsure - Blog and has been published here with permission.