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  • Writer's pictureAmanda Bird

What You Need to Know about Contract Works Insurance

Contract works insurance or construction works insurance isn't anything new to builders. It is a general requirement for essentially all building contracts, as many financial institutions that fund projects require this to act as loan security.

That being said, what exactly does it cover? How long does it last? If these are the questions you have in mind, don't worry. Let's talk about the common questions revolving around contract works insurance:

What Does Contract Work Insurance Cover?

Contract Works Insurance is intended to protect the builder and the company from the loss of the insured value of contract works due to any event of loss, including but not limited to the contractor's liability, fire, and malicious damage.

A construction contract often covers faulty workmanship and design errors, and this is precisely what the policy covers. It also covers abnormal weather conditions and job risks, such as unexpectedly high labour costs.

How Long Does It Last?

Contract works insurance generally spans from commencement all the way to completion. This means that throughout the project, the insurance policy will be in play. However, this isn't always the right time to opt for.

Generally, delays can occur during the project, even when construction has ended. As such, it is recommended that additional time is added after practical completion, as some contracts may require extended cover.

That said, not all contracts behave the same. You must check whether your policy covers new projects, projects underway, or both. Additionally, if you are to take on any speculative works, it is always a good idea to ensure the policy coverage extends to cover the gap between practical completion and strata registration.

What Are Its Limitations?

Contract works insurance expires when works have been completed if you do not opt for additional time. This means that even if you have valid cover, this coverage ends when the works are finished. As such, additional coverage must be arranged for the gap between practical completion and the commencement of the building's next phase.

Another limitation is that the policy does not cover changes, extensions, or alterations to the insured works. For example, if an extension to the project is required, additional coverage must be arranged.

What Do I Need to Know about Contract Works Insurance?

As mentioned, contract works insurance is not a one-size-fits-all policy. As such, it is important to check the policy specifics to ensure that the right coverage is being provided.

This is most important considering the various types of projects that are out there. Some types of projects are riskier than others, such as high-rise projects. Therefore, it is vital to check if your coverage is adequate for the type of project that you are undertaking.

In order to ease the process, it is best to contact an insurance broker, as they can help ensure that the project is adequately covered. With the right contractor insurance, you can rest easy knowing that your financial protection is in place.


Contract works insurance is a fundamental part of every construction project. These policies are needed to secure sufficient cover to protect builders and the company if anything goes wrong. So, if you are still uncertain of what exactly it covers, there is a high chance that you'll be able to find an insurance provider to answer your questions.

It is important to ensure the right coverage is in place for the project; otherwise, serious losses are expected to be incurred. Once again, it is best to contact a broker to ensure that the project gets the coverage it deserves.

New Wave Insurance are experts in helping businesses find the right insurance for their needs. If you need insurance for contract works, reach out to us today!

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