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Single Project Policy To Build Your Own Home

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Contract Works Insurance

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what is contract works insurance australia?

Contract Works Insurance is also known as Construction Insurance.

There are three scenarios when someone might need Contract Works Insurance or shall we say there are 3 types of Construction Insurance policies:

Owner Builder Contract Works Insurance Policy
- This is suitable for people that own a property and have obtained a permit to build their own home.
Single Project Contract Works Insurance Policy
- This is suitable for people that own a property and have engaged a builder to build the project. Some builders also take a single project insurance for one-off jobs.
Annual Contract Works Insurance Policy
- Suitable for builders that build several homes or commercial properties a year
- Provides automatic cover for projects of a certain type and size that have been pre-agreed with the insurer, pretty much covering all jobs a builder does during the year.
- Benefits of an Annual Policy
  - Usually better rates and lower premium
  - Maximum construction period for all projects
  - Less Paperwork
  - Coverage for display homes, products liability, incidental activities, vacant land, and other business activities.

contract works insurance explained

Many people wonder what does contract works insurance cover?

Contract Works Insurance Definition

Contract Works Insurance is a specialised type of insurance designed to cover various risks associated with construction projects.

A Contract Works Policy has 2 sections.

Material Damage (Section 1)
- Covers loss or damage caused by insured events to insured property at the contract site, like a Fire, Storm Damage, Theft etc.
- Insured events are: A sudden, unforeseen, and unintended physical loss of or damage resulting from any cause not excluded by the policy.
  - Key Points:
    - Sudden: The event must occur abruptly and unexpectedly.
    - Unforeseen: The event must be something that could not have been anticipated.
    - Unintended: The event must not be deliberate or intentional.
- Coverage:
  - The damage or loss must occur at the Contract Site as defined in the policy.
  - The policy covers material damage caused by these insured events, subject to the terms, conditions, and exclusions of the policy and any endorsements.
- Examples of Insured Events:
  - Natural disasters (e.g., storms, floods) that are not excluded by the policy.
  - Accidental damage during construction activities.
  - Unintended incidents leading to physical damage to the insured property.
Public Liability (Section 2)
- Indemnifies for personal injury or property damage where the insured is legally liable, caused by an occurrence related to construction activities.
- Personal Injury:
  - Scenario: A visitor to the construction site trips over uneven ground and sustains a serious injury.
  - Coverage: The policy would cover the legal costs and compensation if the construction company is found liable for the injury due to negligence in maintaining a safe site.
- Property Damage:
  - Scenario: During construction, a crane operated by the builder accidentally cuts off a telecommunication cable.
  - Coverage: The policy would cover the costs of repairing the damage to telco infrastructure.
- Third-Party Injury:
  - Scenario: A passerby is injured by falling debris from the job site.
  - Coverage: The policy would cover medical expenses, legal fees, and any compensation awarded to the injured party if the builder is found liable.
- Damage to Vehicles:
  - Scenario: Construction activities results in damage to parked cars.
  - Coverage: The policy would cover the repair costs for the damaged vehicles if the construction company is found liable

Do I Need Contract Works Insurance?

Now that you have a good understanding of what this insurance covers, the natural question is – Do I Need Contract Works Insurance?

Lets see a few scenarios:

You are a start up builder taking on your first renovation or new build job – YES you need it.
You are a home owner, and a builder is going to work on it – Either you or the builder will have to take it out and if its a renovation project, don’t forget to insure the existing property also. Many people make that mistake and can be underinsured.
You are an owner builder – Yes you need it.
You are a trades business owner like installing HVAC systems – talk to the head contractor, maybe you don’t need it if they already have it.

Who pays for Contract Works Insurance?

It doesn’t matter who pays for this insurance whether the builder or the customer, in the end the cost is passed on to the consumer. If you are tradesman or a builder, this will be a cost for you to complete the job and like many others, you are likely to pass it on to the end consumer.

How much does Contract Works Insurance Cost

Many people want to understand how much does Contract Works Insurance Cost. Unfortunately, the answer is not very straight forward as there are a number of factors that affect the pricing of this insurance. For example:

The value of the project – small home extension vs a large industrial warehouse.
The location of project – cyclone and bushfire affected locations cost more to insure.
Duration of the project – Longer durations cost more
Riskiness of the job – like if you are digging right next to the boundary, can it affect the neighbours leading to a public liability claim.

The reality is that each project is different and insurers have different pricing philosophies and the only way to find Contract Works Insurance Cost is to get in touch with a broker, we can help!

Contract Works Insurance Quote

To obtain a quote for Contract Works Insurance, you may submit an online quote request by clicking this link below.

Contract Works Insurance Online Quote

This will provide us with the basic information to get started with a few insurers and if required we will be in touch with you asking for further information about your business and projects etc.

Alternatively, you may want to complete a proposal form which can be accessed by clicking this link below:

Mecon Application Form