Insurance: Contract works and liability insurance: what builders and tradespeople need to know during COVID-19 restrictions

MATTHEW STIMPSON 0417 167 912 matthew.stimpson@ihgroup.com.au

Matthew is a Construction Insurance Specialist at Insurance House and has been with Insurance House since 2018. Throughout his career he has also spent six years at Master Builders Association and at 11 years at HIA Insurance. If you’re looking for expert knowledge in Construction Works & Liability insurance, Domestic Building insurance (all states), Professional Indemnity or Mobile Plant & Equipment insurance, don’t hesitate to reach out to Matthew today for friendly, professional advice.

The impact of COVID-19 on Australia’s building industry is a key concern for Insurance House Group and our clients. The building industry is facing unprecedent challenges and now more than ever, it is imperative that your business has the appropriate level of cover in place to ensure your business and your projects are properly protected.

Below are some key things to keep in mind to assist your business in loss prevention via a Contract Works & Liability insurance policy.

Cessation of Works Exclusion

Did you know that the material damage section of a Contracts Works & Liability insurance policy carries a cessation of works exclusion?

Theft

The Material Damage section of the policy covers the goods and materials that comprise the construction works for loss or damage, including theft.

During times of economic stress, the construction industry often sees an increase in claims for theft of materials and equipment from construction sites.

Thank you for your support and understanding as we work together to overcome this challenge.

Coverage varies with each insurer, but if no work has taken place for a period longer than 30 days, cover will typically cease on the Material Damage section of the policy under the cessation of work exclusion.

This means that should the Government issue a stop-work order on construction sites, or if a project has commenced and is subsequently indefinitely postponed, there would be no cover for fire, accidental damage, burglary and/or theft, storm and more, unless you speak to us and we contact your insurer for an extension.

We ask that all clients be mindful of the exclusion and to please contact me directly for clarity if you have any concerns.

Tips to help protect your property:

Ensure tools which cannot be removed from the site each day are stored in a securely locked container. Most policies do not cover open air burglary and require evidence of forcible entry.

If practical, fit back-to-base alarms on site, install cameras to monitor the site, employ security and check site gates are securely locked each night.

Store materials not yet ready for installation in a secure location such as your factory. Construction insurance policies typcially allow coverage for offsite storage if the items are included in your contracted works. This may also apply to items being provided by the principal. However policies differ regarding principal supplied items, so I encourage you to check your policy wording.

Simple precautions may include removing visible containers or cartons from the site – particularly those which contain white goods and other valuable items.

If possible, fit white goods and entertainment equipment hardware close to practical completion, or when the project is due for occupancy.

General Advice Warning: This advice has been prepared without taking into account your personal objectives, financial situation or needs. You should, therefore, consider the appropriateness of the advice, in light of your objectives, financial situation or needs before following the advice. Please obtain a copy of, and consider the Product Disclosure Statement (PDS) applicable to the general insurance product before making any decision. Insurance House Pty Ltd ABN 33 006 500 072 AFSL 240954.