Contract Works insurance is a business policy for construction workers, grounds people and tradesmen. It protects against any physical damages and losses that can occur during the work. These issues can cause huge financial losses and liabilities, so ensuring you are protected and covered with the right level of insurance is essential before beginning any construction project.
What level of cover you need to ensure you are protected depends on the nature of the project and the services you offer. This guide will help you to understand what Contract Works insurance covers, what isn’t covered, and how much it will cost.
What is Insurance for Contract Works?
Contract Works insurance, also known as Construction All Risks (CAR), is a specialised insurance policy designed to cover physical aspects of construction projects, including the building or structure itself, along with temporary works, supplies, and materials on-site.
It provides protection against a wide range of risks, such as accidental damage, theft, vandalism, fire, and natural disasters, which may cause damage to construction works, materials, and equipment. The coverage makes sure that the policyholder can make a claim and recover the costs of repairs or replacements for damage or loss, the policyholder can claim to recover the cost of repairs or replacements.
What Does Contract Works Insurance Cover?
Contract Works Insurance in the UK is designed to safeguard everyone involved in the construction project including:
- The employer
- The contractor
- Subcontractors
It offers protection against potential claims and financial setbacks that may arise due to damage to materials and supplies like:
- Material damage to on-site plant and equipment and existing structures
- Third-party property damage
- Employee’s tools and personal effects
- Accidental damage to on-site materials
These damages are only insured when caused by events including:
- Fire
- Flood
- Storm
- Vandalism
- Theft
Damage is NOT covered if caused by negligence, general wear and tear, or if the damage happened before the start date of the insurance policy.
What Does It NOT Cover?
It’s important to also understand that Contracts Works insurance is not a complete construction insurance policy. Although it is important in preventing financial losses due to damage, it does not cover any other aspect of your project. For example, Contract Works will not include things like plant equipment, damage to the property, or issues with the quality of construction work.
For these aspects of your construction project, you will need other types of construction-specific insurance policies like Professional Indemnity or Non Negligence.
Is Contract Works Insurance the Same as Professional Indemnity?
Sometimes Contract Works insurance can be confused with Professional Indemnity insurance. While both are construction-related insurance types, they are two very separate policies that cover very different things.
Contract Works Insurance covers physical damage and loss related to the construction project. So it will protect materials, equipment, and temporary works, against risks like fire, theft, and accidents.
Professional Indemnity Insurance covers claims arising from errors, omissions, or negligence in the services provided. It safeguards against potential legal actions resulting from professional mistakes.
Is All Risk Insurance The Same As Contract Works Insurance?
Yes, Contract Works Insurance provides the broadest coverage possible for construction projects. It works on an “all risks” basis, meaning the policy doesn’t list specific events that trigger a claim. For this reason, Contract Works Insurance is sometimes known as All Risk Insurance.
How Much Does Contract Works Insurance Cost?
The cost of Contract Works Insurance will vary depending on the project you’re working on. Higher risk and higher value projects will tend to have a higher insurance premium but will likely be lower than an annual policy.
Where To Purchase Contract Works Insurance
For a realistic cost of how much your Contract Works Insurance would be, you can get a free, no-obligation quote from construction-specific brokers, like Construction Insure.
Every policy we arrange is tailor-made to suit the needs and budget of each policyholder. All you need to do is speak to one of our team, tell us about your project, and we’ll generate a no-obligation quote that is unique to you.