Contractors’ All Risks Insurance /
Contract Works Insurance
What is Contractors’ All Risks Insurance and Contract Works Cover?
Construction sites are very complex environments with a lot of variables that can go wrong. These variables can cripple a business financially, cause damage or worse still, cause injury or death.
Contractors’ All Risks insurance (also referred to as Contract Works Insurance) provides a comprehensive cover for damage that occurs during construction projects and is intended to protect the needs of construction companies that work on site or on someone else’s premises.
There are several elements that make up a ‘contractors policy’. Covers include:
- Contract All Risks Insurance
- Contract Works
- Own Plant, Hired in Plant,
- Advanced Business Interruption
- Public and Products Liability Insurance
- Employers Liability Insurance
- JCT
Many smaller firms will have less of a need for contract works cover but as you get bigger, take on larger more complex jobs or the total value of a specific contract is growing in comparison to your turnover then your requirement for it will grow
What does each section of a Contractors’ All Risks policy cover?
| Cover | Description | Claim Example |
|---|---|---|
| Contract Works | Contrat works insurance is intended to cover loss or damage to permanent or temporary works as well as materials and long as they are declared within the turnover or total sum insured . These are usually covered at the contract site until completed, whilst in transit to and from site and during any maintenance and defects period
What is also covered by contract works insurance?
What is not covered by contract works insurance? Contract works usually does not cover rectifying or replacement due to a defect in the design or damage to exisiting structures that were present on site bofore the works started. |
Scenario One: You are building an extension to an existing house and a there is significant damage caused by a fire. Contract works insurance cover could cover the cost of redoing the work including labour and materials and tools.
Scenario Two: You are contracted to construct roofs on a new build house development. You are 1/3 through the job when a storm damages the tiles that you’d already laid. Contract works insurance cover could cover the cost of the rework including labour, materials and tools if required. |
| Own Plant / Hired in Plant | Plant cover usually comes in two areas. Plant owned by you and plant hired in by you. Plant insurance covers loss or damage to constructional plant and temporay buildings. For the case of hired in plant the cover will also include loss or damage as well as continual hiring charges. | Scenario One: You are working on a large commercial development and have 3 diggers on site. Overnight one of the diggers get stolen. They were alarmed and covered by CCTV. Your contract all risks insurance arranged settlement in order for you to replace the item.
Scenario 2: You had £10,000 of tools in a locked container overnight which was alarmed. Theives stole the entire contents. Your insurace policy respoonds to replace the iems. |
| Public Liability | Public Liability Insurance covers Injury or damage that is caused by you to a third party or third party property.
A Public Liability insurance policy does not typically cover financial loss although extensions are available in certain circumstances. |
Scenario One: You are working from scaffolding to repair the side of a building. A large tool item falls from height and damages a parked vehicile. Your policy will cover the resultant damage to their property.
Scenario Two: You are working on an existing structure completing a full re roof. You are using a heat source that is agreed by the insurer but unfortunately the building sets on fire causing major damage. An employee of another construction firm is injured during the incident. Your insurance will pay for the damage to the third party premises as well as compensation for the injured party. |
| Employers’ Liability | Employers’ Liability Insurance covers you from work related injury or illness from emloyees. If you have anyone working for you, whether that is in a temporary or voluntary position then it is required by law. | A constuction worker falls from height and sustains significant injuries. If it is proven to be as a result of your negligence then a compensation claim may be aimed at you. |
Contractors’ All Risks Insurance and Contract Works Insurance can get be very simple or very complex to arrange. We have the expertise and experience to protect your for these exposures no matter how small or large your company and projects are.
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