Have you been contracted to build a house or extend a property? If yes, then you probably need contract works insurance. If you don’t have it and any new structure you are working on is destroyed or damaged, before the job is complete, you could lose the work and materials you have already paid for.
Contract works cover will protect you against accidental loss, destruction or damage. Offering cover for materials and labour that you’ve used. Meaning you can restore the project to its status before the damage – protecting you and your customer from financial loss.
Contract works insurance, also known as contractors all risks insurance is widely used in the construction industry to cover all the new works being undertaken in a contract. Notice the phrase “all the new works” because if a builder is doing an extension on a house, the actual house isn’t covered by the insurance, only the extension. The house could be included if there is an option to include “existing structures”.
In the example above the contract works will include the materials on site and all the new works that have been done. So that if on the day before completion there was an insured peril such as a fire, storm or flood which wrecked all the new contract work, insurers would pay for it to be redone. The cover provided is known as “all risks” which includes, fire, storm, flood, burst pipe, impact, accidental damage and theft. It would not cover poor or shoddy workmanship.
JCT contracts will usually determine which party is required to insure the works.
The premium for contractors all risks policy will be based on various factors, and the policy can be on a annual basis or one off contract specific.
Factors which affect the insurance premium.
As with most insurance policies there are several factors that will infect your insurance premium. Below are a few of the main ones:
- The actual work that is being undertaken. For example installing a basement is high risk and is likely to incur a higher cost than converting a detached garage.
- The contract price.
- The length of contract
- The claims history of the contractor.
Additional extras
Available add-ons on a contractor all risk policy from Bruce Burke include: –
Own plant
For any build it is likely that you are going to use some form of plant equipment. Bruce Burke offers a 12-month annual policy for ‘all risks cover’ which includes cover for accidental damage, fire, theft, malicious damage, vandalism, flood, impact, and lightning. A separate road risk policy may be required.
Find out more about Plant here
Hired in plant
In many cases you are liable for any damage or theft to any plant equipment that you are hiring to complete your contracted work. A hired in plant insurance policy covers you with liability insurance under the terms of your hire agreement, to pay compensation for damage to the plant. Find out more about hired plant insurance here.
Tools
You need your tools to work, and if they aren’t available for whatever reason then you face a loss of income. Tools insurance can cover you for the cost of replacing your powered and non-powered tools if they are damaged, misplaced or stolen.
