The Federation of Master Builders

Everything you ever wanted to know about Contract Works Insurance

Published date: 27 April 2023

How much do you know about Contract Works Insurance? Do you think you know enough about it to truly determine whether or not you need it?

All construction work no matter how small or simple contains an element of risk, but that’s where insurance comes in. As a surprisingly affordable section of cover, Contract Works is often overlooked as not being ‘essential’ in an insurance policy. Whilst many business owners have a lack of understanding as to what is covered by Contract Works, and what isn’t covered under Public Liability. If you feel puzzled by the jargon, here is a brief guide to Contract Works Insurance:

What is Contract Works Insurance?

Contract Works Insurance, also known as Contractors All Risk, is an insurance for builders and other tradesmen; designed to protect building works in progress, covering for any loss or damage that happens during construction. Whether you need Contract Works depends on whether your client contracts hold you responsible for unfinished work on a site, so you should check the terms of your contracts carefully.

What does Contract Works Insurance cover? 

Contract Works Insurance can cover the cost of repairing or redoing work on a construction site and is taken out to insure aspects of construction projects such as:

  • Damage caused by an insured event such as: fire, flood, storm, vandalism or theft
  • 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.

Whether you're working on a new home and a fire destroys some of the part-finished building or your site is broken into and vandalised, your Contract Works Insurance should cover the cost.

What’s not covered by Contract Works Insurance?

Contract Works Insurance doesn’t cover damage to any existing structures on the site. For example, if you’re building an extension and there’s a fire at the property, your contract works insurance could cover the cost of repairing the extension that’s in progress, but not damage to the rest of the house. Your client’s home insurance should cover this instead.

What should you consider when choosing your cover?

When you’re choosing how much Contract Works Insurance to buy, you need to consider the total cost of your largest project, including labour and materials. It is important to buy the right level of cover so you’re covered if you come to make a claim. If your biggest project is a £1 million project over two years, you need £1 million of Contract Works Insurance.

Build a tailored policy with FMB Insurance

At FMB Insurance Contractors All Risk cover is flexible with the option available to take out a single contract or combine this policy with Employer’s Liability, Public Liability, and tool cover. So if you’re looking to make sure your future construction sites are fully covered, Request a quote from FMB Insurance today.

Follow us on Twitter or like us on Facebook     

Keep in touch with FMB Insurance

For regular updates from FMB Insurance, sign-up here with your email address.