Contract Works & Liability Insurance: What builders and tradespeople need to know during COVID-19 restrictions

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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 unprecedented 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?

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.

 

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.

Below are some 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 contained 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.

 

If you have any questions, concerns or want more information about Contract Works and Liability insurance, call us on 1300 305 834 or email us on ih@ihgroup.com.au

 

Our advice is general in nature. To read the full General Advice Warning click here.

 

 

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