Contract Works Insurance

Contract Works Insurance: Protect Your Projects Like A True Professional

Many Builders and Tradies do not understand the Contract Works Insurance because no body explained it to them.

At CoverTradie, we will explain it all in simple terms and organise the Construction Insurance professionally so that you are fully covered without spending a dollar more than you should.

There are 3 types of situations where you need Contract Works Insurance:

Owner Builders:

A Single Project Policy

Builders & Trades:

Single Project Policy for a One-off Project

number Builders & Trades:

Annual Policy with multiple projects

CoverTradie can sort out all of those as per your requirements.

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Frequently Asked Questions (FAQ)

What is Contract Works Insurance?

In simple terms, just like you insure your home against perils like storm, fire, flood etc. to make sure you don’t suffer a financial loss should something bad happens, you can insure your construction projects.

Contract Works Insurance is just that! Its Construction Insurance for you projects that are or will be under construction.

What does Contract Works Insurance cover?

Contract Works Insurance provides cover for two main categories of risk:
– Material Damage
– Public Liability

Material Damage: As the name suggests, the Material Damage component of your policy protects against loss to the material used in the project. As a simple example: Say you are a builder engaged in construction of a commercial building. Due to a storm, a large tree from the next-door block has come crashing over your site resulting in significant damage to the structure being built.

This type of loss is covered by the material damage component of your policy.

Public Liability (Optional Cover): The Public Liability component of your policy protects your business against financial loss if your business activities result in damage to someone else’s property or causes an injury to or death of a person. As an example: say precast walls were being erected at your project site and due to an accident, a large wall falls damaging the property next door and they demanded charges to fix their loss. This type of loss is covered under the Public Liability component of your policy.

Public Liability component can be taken up as a separate policy also. Give us a call if you need clarification. Its just like phone and internet, you may choose to have them under the one bill, one provider or have them set up separately.

Who needs Contract Works Insurance?

The idea behind Contract Works Insurance is to protect your projects whilst they are under construction. You may need to protect your projects in the capacity of:
– An Owner Builder – renovating, extending or building a new home
– A Builder/Tradesman – building one or many projects where you are supply materials
– A Principal – The owner of the project where you have organised a builder to handle the construction however you are required to insure the project.

Is there Contract Works Insurance for homeowners?

Yes, if you are a homeowner who needs to renovate, extend a home or build a new one altogether as an owner builder, you will need Contract Works Insurance. In general terms, its often called Owner Builder Insurance.

What is Contract Works Insurance for builders?

Regardless of whether you are a startup builder or a more established business, when you are building homes or commercial structures, you are outlaying some costs to build to get to a stage where your clients release progressive payments owed to your business.

Its no secret that construction is a very competitive industry with small margins. Any losses can easily result in a financial disaster. That includes losses to your projects under construction. Imagine having a project where you were going to make $40,000 but then the project suffered a fire loss resulting in a loss of $100,000. Its easy to the sums on what all this means.

You don’t usually get your all your payments until the project is ready for handover, complete in all respect as per the construction contract.

To safeguard against losses during the period of construction, Contract Works Insurance for builders is essential. Give us a call to discuss.

What is annual Contract Works Insurance?

You have great plans to build many homes, apartments or warehouses or factories, Right? You need an annual Contract Works Insurance policy. Whilst a single project policy could do the job i.e. you organising insurance for every project you undertake separately, that wouldn’t be the most efficient way of doing so.

Annual Contract Works Insurance policy can provide automatic cover for all your projects that you are going to build in the next 12 months. You just need to declare upfront what types of projects you plan to undertake, and the typical size (dollar value) of the project. Based on that, the underwriters calculate the annual premium for your insurance.

At the end of the year, you then need to do a declaration on what projects you undertook and the total value of those projects which is then tallied up to your start of the year estimates. If your end up doing less work than initially estimated then you get a refund (there’s a way to work it all out, we can help you with that). If you end up doing more projects during the year than initially estimated, you then pay an additional adjustment premium. This is a great way to ensure continuity of cover and pricing certainty.

What is Maintenance Period in a Contract Works Insurance Policy?

Construction contracts usually include a defects liability period during which the Contractor is responsible for repairing or rectifying defects that appear in the works. The period usually commences upon practical completion of the works and runs for a specified time frame (sometimes also known as the maintenance period).

During this period, you are still working and the project is still in your control. If there are any losses then your insurance will cover.

Is Contract Works Insurance the same as Contractors All Risk Insurance?

Yes, Contract Works Insurance, Construction Insurance and Contractors All Risk Insurance, they are all the same.

Is Contract Works Insurance the same as Professional Indemnity Insurance?

No, Contract Works Insurance (as discussed above) and Professional Indemnity Insurance are two different types of policies. Professional indemnity insurance protects you and your business against claims for alleged negligence or breach of duty arising from an act, error or omission in the performance of professional services. Example, you are an architect and you produced a building design that is inherently faulty, this could result in you getting sued for costs. Professional Indemnity Insurance covers you there.

You however are a builder most likely and the advice you provide is more likely to be incidental to your business unless you are a design and construct business.

Some insurers offer Professional Indemnity insurance as an add-on to Contract Works Insurance, that is mostly for builders/trades that do low complexity work. Your business may need a standalone Professional Indemnity Insurance which provides the right type of coverage for your business. Talk to us to learn more about it.

Does Contract Works Insurance cover defective workmanship?

No, defective workmanship is not covered by Contract Works Insurance or for that matter any other insurance policy. Workmanship is how you create value in a project and is something in your control. Insurance covers for events that are not in your control.

How much does Contract Works Insurance cost?

The cost of Contract Works Insurance is dependent on a range of factors, which include:
– The nature of your projects
– The location of your projects (Cyclone, Flood or Bushfire affected locations are riskier)
– The size, duration & complexity of your projects

Who pays for Contract Works Insurance?

You are most likely in one of the two scenarios. If you are an owner builder, then you pay for the contract works insurance. If you are a builder that constructs buildings for others and they pay you as per the contract for the works and the materials supplied then you are likely to have your own insurance and pay for it.

Do you serve builders in all states?

Yes, CoverTradie can organise Contract Works Insurance across Australia. We serve all states including VIC, NSW, QLD, WA, TAS, SA.

Which insurers do you deal with?

CoverTradie is a full-service insurance broker, part of the steadfast network. We can organise Contract Works Insurance through, CGU, VERO, QBE, Allianz, Mecon, Sura and a host of other Lloyds underwriting agencies.

Can I get a Contract Works Insurance online quote?

You will find it quite difficult to get an online quote for Contract Works Insurance given the complexity of the field. Most insurers would like to get quite a bit of information before they offer the cover. It’s difficult to gather all that information online.

We have an easier solution, we’ve fine tuned the process around it to cut the red-tape and make it easier. A short phone call can get you started and quotes obtained promptly. Give us a call.