When it comes to insurance for those in the construction, building and civil works industry the road forward can be confusing. The following covers some of the aspects related to annual-based contract works insurance but to move forward successfully the best idea is to talk to an expert such as Morgan Insurance.
What is Contract Works Insurance?
You may already have a business insurance or trades insurance package policy in place. This isn’t a contract works or construction insurance policy. There are differences and Morgan Insurance can guide you through the differences to ensure you are fully covered from every angle.
Generally speaking, contract works insurance (sometimes referred to as construction works insurance) covers a specific construction project or can be taken out annually to cover multiple construction projects. This type of policy protects parties involved with a contract, usually between a head contractor and a principal or owner. Contract works insurance will commonly cover all parties to the contract including the principal and any sub-contractors.
Who needs Contract Works Insurance?
This type of policy covers a business or individual running a contractual construction project. It is suitable for many areas of construction including residential, commercial, industrial, and civil works.
Some of the individuals who need this type of policy include:
- Civil Engineers
- Tradespeople running their own projects
- Sub-contractors who run their own projects on the side
Annual-Based vs Single Project
No matter the size of your operation, whether small, medium, or large, contract works insurance is highly recommended. It’s also advantageous for sub-contractors and owner-builders to take out this type of policy. So, do you require a single project policy or an annual-based policy?
A single project policy is better suited to owner-builders constructing their own home or sub-contractors who might run a few projects on the side.
Annual-based policies are better suited to professional businesses that undertake multiple projects throughout the year. Obviously, it’s much more cost-effective and efficient to take out one policy that will cover numerous contracts rather than take out numerous policies to cover each individual contract.
Cost and Discount
The cost of contract works insurance will be worked out from a number of various elements. This is why it’s important to speak to an expert like Morgan Insurance. One of the main elements is the expected value of each of the contracts undertaken. However, should a construction project fall short of the expected value it is possible to get a refund on your policy. The refund can then be used as a discount on the following year’s policy.
Does Contract Works Insurance replace a Public Liability Policy?
A contract works policy can include public liability insurance. If so, this is cost-effective as you won’t need separate public liability insurance. However, before choosing not to take out a separate public liability policy, it’s important to speak to an expert to ensure you’re fully covered and not left exposed to unforeseen circumstances.
What else does a Contract Works Insurance Policy cover?
Public liability covers you for property damage or personal injury caused due to your negligence. However, there are many other incidences and catastrophes that can occur which are outside of your control. Contract works insurance can cover the building or project which is under construction as well as the equipment, tools, and materials involved in the construction. Depending on the policy, some of the risks covered include:
- Natural disasters, such as storm, fire, flood, wind, landslip etc.
- Damage caused by defects
- Accidental loss of or damage to on-site materials and equipment
- Theft, malicious damage or vandalism
- Smashed glass
- Third-party property damage and third-party injuries