Everything you ever wanted to know about contract works insurance

This article is provided by Simply Business

When you’re working on a construction site, one of the worst things that can happen is for something to damage or destroy your hard work.

While your client’s buildings insurance should cover any existing structures, what about the buildings that you’re partway through? That’s where contracts work insurance comes in.

What is contract works insurance?

Contract works insurance is a cover that protects work in progress on a building site. It’s designed for builders and other tradespeople, and it can help pay to repair or redo work that’s damaged by an insured event like fire, flood, storm, vandalism or theft.

Do I need contract works insurance?

Contract works insurance is usually taken out by building contractors, property developers, bricklayers, plasterers, and other construction industry workers.

Whether you need contract works insurance depends on whether your client contracts hold you responsible for unfinished work on site, so you should check the terms of your contracts carefully.

What does contract works insurance cover?

Contract works insurance can cover the cost of repairing or redoing the work you’re undertaking on a construction site if it’s damaged or destroyed while in progress. This can include the cost of labour, materials and tools to restore the work to how it was before disaster struck.

For example, your construction company is working on a new hotel building when a fire destroys some of the part-finished building. Your contract works insurance could step in to cover the cost of the repair. Or, you’re tiling a roof when a storm causes damage to the tiles you’ve already put down. Your contract works insurance could cover the cost of redoing the tiling.

What’s not covered by contract works insurance?

Contract works insurance doesn’t cover damage to any existing structures on the site. So for example if you’re building a home extension and the home is flooded, your contract works insurance could cover the cost of getting the extension back to the stage it was at before the flood, but it wouldn’t cover the cost of damage to the rest of the house. This should be covered by the homeowner’s buildings insurance instead.

Your policy will also include specific exclusions, so you should check your policy documents carefully to see what is and isn’t covered.

Buying contract works insurance

You can buy your contract works insurance as part of a tradesman insurance policy, including other key covers like public liability insurance, employers’ liability insurance and tool cover.

When you’re choosing how much contract works insurance to buy, you need to consider the total cost of your largest project, including labour and materials. For example, if your biggest project is a £1 million project over two years, you need £1 million of contract works insurance.

This article is provided by Simply Business