What is Contract Works Insurance?
Contract Works Insurance (also known as Construction Works) provides cover for a construction project or multiple projects. It covers accidental theft and damage of contract works during construction as well as third party liabilities and compensation.
Who needs it?
If you’re a Principal, Builder or a Contractor working on construction project, then you can benefit from Contract Works Insurance.
What does Contract Works Insurance include?
Most policies cover you for:
- Material damage or theft of contract works,
- Third party property damage,
- Material damage to on-site plant and equipment and existing structures,
- Third party bodily injury,
- Legal Liability,
- Advanced loss of profits and rental,
- Delay in start-up.
A note on Contractual Liability Insurance
Do you understand what you’re signing?
After tendering, negotiating and working hard to secure a job, signing a Work Contract can seem like a mere formality, plus you’ve got insurance – so if anything goes wrong you’re covered, right?
Many business owners are unaware that a typical Public and Products Liability (and most professional liability) policies actually exclude Contractual Liability coverage unless specifically agreed by your Insurers on a per contract basis. However, despite this fact, most work contracts will include specific contractual requirements within their Indemnity Clauses such as:
- Hold Harmless Agreements (i.e. “In the event we are at fault, you can’t sue us”)
- Difficult Indemnities and Warranties (i.e. “We are responsible for nothing, and you are responsible for everything”)
By agreeing and signing to these conditions, you are in effect, agreeing to sign away your insurer’s rights of recourse and legal positioning in the event of a claim. If you have not had your insurer agree to these contractual requirements, your insurer will likely decline your claim as these are contractual liabilities which have prejudiced the insurer’s position in protecting you.
Most Contracts will call on you to provide coverage for:
- Workers Compensation Insurance,
- Public and Products Liability Insurance,
- Contract Works Insurance (also possibly Difference in Conditions, or Difference in Excess requirements),
- Motor Vehicle Insurance, and
- Professional Indemnity Insurance.
As an example, you may have a $10,000,000 Public Liability limit where the contract calls for a $20,000,000 limit. In the event you sign a contract with a particular insurance requirement and you do not hold that particular coverage – this will put you in breach of contract and potentially open to litigation.
How Coverforce can help
We offer a FREE contract review service to existing customers as a value-add to our construction clients who are entering into contracts with principals. Often, these contracts contain various and sometimes tough conditions and requirements. The review will involve reviewing your:
- Indemnity Clauses, and
- Insurance Requirements.
We are able to advise on both whether a) you have the required coverage in place and b) whether or not your level of coverage is adequate.
IMPORTANT: We employ qualified legal practitioner(s) to provide desktop advice and recommendations. However, it’s important to note that the review service will contain information that is general in nature and is not intended to be, construed as legal advice.