If you are working in a construction project, then you will be involved in different areas before you will be able to accomplish a project. As your construction work develops, you will be facing different kinds of risks. At the same time, you need to ensure that the project will be finished on time.
The right contract works insurance must be able to cover all the stages of the project, not just the current stage of the construction projects.
It should protect the project owner, subcontractors, builders, and other staff who are working on the construction. Most of all, it can provide protection to the construction site, while it is just constructing and until such time that it is finished.
What is a contract works insurance?
Contract works insurance is coverage specifically designed for builders and other types of tradesmen who are involved in the construction industry. It can cover ongoing works being done on a site. This can pay for the repair as well as the reconstruction of the work that is still in progress in the event that it was damaged by fire, theft, storm, flood, vandalism, and other types of insured events.
Why you need contract works insurance?
If you are a building contractor, then you should examine your client’s contract. It is essential that you purchase contract works insurance policy if you are held accountable for the unfinished works. Aside from building contractors, this cover is also very useful for carpenters, tilers, bricklayers, electricians, plasterers, and most of all for property developers. Anybody who works in the construction industry requires a contract works insurance in order to protect their work in progress.
What is covered by a contract works insurance?
With a contract works insurance, you can have peace of mind since it can cover the works that you are presently doing on the site. It can pay for its repair cost or rebuilding cost in case it was damaged or destroyed. With the right level of insurance, it can pay for the cost of labor, materials as well as the equipment needed in order to get the work restored back to its condition before it was damaged.
For instance, you are almost done constructing the house extension when an unexpected fire suddenly occurred on the site. As a result, part of the extension was destroyed. If you have contract works insurance, then it can pay for the cost of repairing the work.
Another scenario would be if you are constructing a new commercial property and your roof is ripped off by strong winds and thunderstorms. Replacing the roof can be costly, however, if you have contract works insurance, then it can cover the cost of its replacement.
What is not covered by a contract works insurance?
Unfortunately, contract works insurance won’t be able to cover any constructions which have already existed on the site. For instance, if you are constructing an extension and suddenly a fire occurred on the property. Your contract works insurance can only pay for the repair cost of the extension that is currently ongoing. Keep in mind that it won’t be able to pay for the damages on the remaining parts of the house. Perhaps, if your client has home insurance, then it can be covered by this policy.
Typically, contract works insurance can cover any damages caused by fire, theft, storm, flood, or vandalism. However, it won’t be able to pay for the damages caused by terrorism. Be sure to read your insurance policy carefully specifically if there are exclusions.
How to get the right coverage for your contract works insurance?
Getting the right level of contract works insurance is essential so you can guarantee that you are covered in the event that you want to make a claim. In order to do this, you must choose a cover level that matches the overall cost of your largest project. Compute everything including the labor, materials, equipment, etc. This is essential even if your project will take more than a year to finish.
For instance, your largest contract is worth £2 million. This project is for the construction of five properties which must be accomplished within 18 months. Hence, it would be practical to take out a contract works insurance that has a cover level of at least £2 million.
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