Contract Works Insurance Explained: Why Every Builder Should Have It
Building projects can involve multiple risks, from damage to works in progress to unexpected delays. For builders, contractors, and tradespeople, contract works insurance can offer essential protection for ongoing projects. Without suitable cover, rectifying unforeseen damage or loss could result in significant financial strain.
We explore what contract works insurance can include, why it could be an important consideration for builders, and how brokers can help arrange policies that suit the unique risks involved in construction.
What Is Contract Works Insurance?
Contract works insurance, sometimes referred to as contractors’ all risks insurance, can provide protection for construction work that is underway. This type of cover may help pay for the cost of repairing or reinstating work that is damaged by insured events such as fire, flood, storm, theft, or vandalism.
Builders may find contract works insurance particularly valuable when:
- They are responsible for projects until completion.
- They need to protect building materials, equipment, and partially completed work.
- Their contract requires them to carry specific levels of cover.
Brokers can assist in sourcing contract works insurance from regulated providers to help ensure builders have protection in place that aligns with project requirements.
Why Builders May Need Contract Works Insurance
Construction sites can present numerous risks that could lead to costly setbacks. Without protection, builders may face out-of-pocket expenses to repair damage or replace materials if something unexpected occurs.
Contract works insurance can support builders in covering:
- Loss or damage to ongoing work
- Theft of materials or equipment from site
- Damage caused by storms, floods, or fires
- Unforeseen project delays due to insured incidents
Builders often work under contracts that place responsibility on them for the works until they are handed over to the client. Having the appropriate cover could help manage this risk effectively.
What Can Contract Works Insurance Include?
The scope of cover can vary depending on the insurer, the level of protection selected, and the specific needs of the builder. Key areas that contract works insurance could cover include:
Work in Progress
Protection can apply to the physical works being undertaken, whether that is a new build, extension, refurbishment, or repair. If the work is damaged before completion, contract works insurance could assist with reinstatement costs.
On-site Materials
Building materials stored on-site may be protected against theft, fire, or accidental damage. This can be particularly useful for safeguarding expensive or specialist materials awaiting installation.
Temporary Structures
Scaffolding, site huts, and temporary fencing can also be included in some policies, ensuring that the full construction environment is considered.
Hired Plant & Tools
Policies can sometimes offer additional protection for hired equipment or tools being used on the project. Builders may also wish to explore cover for their own tools and machinery.
Employee Tools and Personal Effects
Some contract works insurance policies can be extended to protect the personal tools and belongings of employees while on-site.
Subcontractor Work
Where subcontractors are involved, it is often important to check whether their work is covered under the main contractor’s policy or if they need to arrange separate cover.
Additional Cover Builders May Consider
Contract works insurance is typically just one part of a wider protection strategy for builders. Additional covers that may be beneficial include:
- Public Liability Insurance – Can cover claims made by third parties for injury or property damage.
- Employers’ Liability Insurance – May be a legal requirement if staff are employed.
- Professional Indemnity Insurance – Can help protect against claims related to professional advice or design work.
- Plant and Machinery Insurance – Can offer cover for owned or hired construction equipment.
It may be helpful to arrange combined policies that include these elements for more comprehensive protection.
Choosing Suitable Contract Works Insurance
When arranging contract works insurance, builders may wish to carefully review:
- The total value of the project to be covered.
- Policy exclusions and any site security requirements.
- Whether materials stored off-site are included.
- Limits on cover for hired plant and employee tools.
- Contractual obligations set out by clients.
Brokers can help builders find competitive policies from established insurers, supporting them in selecting cover that matches their project size, scope, and risk profile.
Helping Builders Protect Their Projects
Construction projects can be vulnerable to delays and damage from events beyond the builder’s control. Contract works insurance can provide valuable financial support, helping to keep projects on track and minimising the potential impact of unexpected incidents. By exploring tailored options, builders can take practical steps to protect their work, materials, and financial investment throughout the life of a project.