Contract Works Insurance
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Contract Works Insurance for Construction Projects
Contract Works Insurance (also known as construction insurance) protects building projects, contractors and developers from physical loss or damage during construction. Projects face unique risks: accidental damage, theft of materials, third-party injury and the financial impact of construction delays. Bracesure structures cover to match contract value, project duration and site-specific exposures.
Core covers and features
- Contract works (physical loss or accidental damage to the works)
- Materials, temporary works and site huts
- Theft of tools, plant and materials
- Public liability arising from the works
- Optional extensions: existing structures, wet trades, testing & commissioning, latent defects/running off cover (subject to insurer)
Why contract-specific insurance matters
Clients, principals and financiers commonly require contract works cover as a condition of tender or loan. A correctly arranged policy:
- Protects the agreed contract value and reduces financial shock from site losses
- Meets principal and lender requirementss while you recover
- Can include nominated subcontractors and extensions tailored to project needs
Who needs contract works insurance
- Builders and principal contractors
- Subcontractors (as nominated or via separate policies)
- Developers and project owners
- Hire companies supplying major equipment
How sums insured and policy period are set
Sum insured is usually calculated from contract value plus allowances for variations, removal of debris, professional fees and potential liquidated damages. The policy period should cover the full construction duration, including handover and any agreed defects liability period if bought.
Common exclusions & risk controls
Typical exclusions include wear and tear, defective design, and deliberate acts by the insured. Risk controls include:
- Site security and tool tracking
- Materials storage protocols and on-site supervision
- Regular inspections and contractor pre-qualification
Claims handling & dispute resolution
If a loss occurs, timely notification, accurate evidence (photos, invoices, site records) and broker-led claims advocacy speed recovery. Bracesure coordinates with insurers, loss adjusters and contractors to manage repairs and minimise delay.
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Frequently asked questions (FAQs)
Often required by principals or lenders for larger projects.
Based on contract value plus allowances for variations and removal of debris.
Yes, by nomination or separate cover.
Plant can be included or separately insured.
Delay/start-up cover can be arranged separately.
Latent defects or run‑off may be available.
“Millions of dollars in tools, equipment and materials are stolen from construction sites every year. This can have a significant cost impact for builders and their clients and result in delays to the building period if supplies are unable to be replaced.”
Construction insurance - Claims Example
After working for other construction company owners all his working life, Craig starts his own small earthmoving firm. In the first couple of years, he borrows money and invests much of his income back into the business, buying the latest equipment and a work vehicle.
After starting work on a new construction at a new site, he leaves his tools and equipment locked in a garage on the site overnight. But that night, thieves break into the garage and steal Craig’s tools, worth $25,000.
Craig contacts his insurance broker who helps him put in a claim. He’s quickly reimbursed for his loss, so he isn’t out of pocket and can keep his business running.