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What Do You Need to Know in Construction Insurance

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Just like any other business, the construction industry deals with a lot of jargon and terminology that people outside the construction industry may find quite confusing.

On top of this industry-relevant jargon, there is construction insurance terminology that relates to construction projects in case of damages, claims, and liabilities. If you are confused about some of the common critical terms used in construction insurance, you might want to read some definitions provided below:

Contract Works Insurance

Contract Works Insurance (also known as Construction Works) provides cover for a number of risks. Some of these risks may be outside of a builder’s control. Contract works insurance provides coverage for losses to the build project caused by insured events. In addition, contract works insurance can also include public and product liability cover. A contract works insurance policy may cover a build project from risks like a fire, storm damage, malicious damage, theft or accidental damage.

Material Damage

Material damage is insurance coverage for the physical loss or damage to a building, building materials or temporary works and equipment that are related to the construction.

Legal Liability

This covers your liability to pay compensation for injury or death to other people or loss or damage to their property as a result of an incident which is connected to your commercial construction.

Contractual responsibility

For every contract, there lies a responsibility for the involved parties to act according to their agreement. It could be through an exchange of something in monetary or commodity, depending on their agreed obligations. And this is where contractual responsibility comes in.

Principal supplied items

This refers to the commodities and construction supplies that have been supplied by the principal to a contract or sub-contractor and that are going to be used during the construction project.

Materials in storage

Materials need to be stored whilst the construction project is underway and they have not yet been required. These materials need to be stored securely, often in a shipping container or alternative, to reduce theft, damage and exposure to the elements.

Management Liability 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.

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Business Insurance

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.

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Business Package

Purchase up to six products under one Business Insurance Package.

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Existing structures

This refers to any structures that are part of the commercial construction and existed before the project commenced. Some existing structures can be maintained and incorporated into a project and some existing structures may be demolished and removed to enable the project to develop.

Professional Indemnity

This is the type of coverage that protects your business from any claims made by third parties from the negligent pieces of advice and services that you may have provided, even advice that you may have provided for free.

Plant & Equipment

This refers to any tangible assets that are used in your business operations. This could be in the form of tools, machinery, and technology, among other things.

Commercial Motor

This refers to any type of vehicle that is used to deliver goods and transport passengers and materials for business or personal purposes.

Cyber Crime Protection

This is the type of coverage that may protect you from any criminal activity done against your technological devices such as mobile phones, computers, ipads and more. These activities may come in the form of malware, and computer viruses, among other things.

Management Liability

This refers to the consequences or claims that you might be liable for that were not part of the professional services that you agreed with the other party but were done in connection with your duties as a director

Workers Compensation

This refers to the type of coverage that may protect the employees from suffering from work-related illnesses or injuries. This allows them to pay for the medical expenses and recover wages lost due to such illnesses.

Silverback Insurance is passionate in helping builders and specialises in finding you the right insurance solution, tailored to your business needs. We work in collaboration with innovative technology such as Procore that looks to disrupt the industry for the good of all.

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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.

Silverback Insurance Pty Ltd, ABN 74 643 561 746, AFSL CBN AFSL 233750