Why Renovation Projects Need Specialised Insurance

Renovating an existing structure isn’t the same as building from scratch. 

You’re working with older materials, unpredictable conditions and sometimes, strict council regulations. 

Without the right insurance, unexpected issues can lead to costly delays or financial losses. 

Renovation projects in Australia increased by 40% in 2023-24.

This boom highlights the growing need for insurance that addresses the unique challenges of renovations.

Here’s why renovation projects demand a closer look at insurance:

• Existing Structural Issues: Older buildings often hide problems, like weak foundations, outdated wiring or asbestos, which can surface during renovations.
  
  These can lead to accidents or costly repairs if not properly covered.
  
  
• Heritage Regulations: There are properties that are heritage-listed, requiring compliance with strict council guidelines.
  
  Mistakes can result in fines or rework, which insurance can help mitigate.
  
  
• Contractor Risks: Whether it’s a builder’s error or an injury on-site, renovation projects involve multiple parties, increasing liability risks.
  
  
• Weather and Environmental Factors: Unpredictable weather, from storms to heavy rain, can damage partially renovated structures, especially if they’re exposed during construction.

Key Risks in Renovating Existing Structures

Renovation projects come with challenges that standard Home Insurance or Builders Insurance may not fully cover. 

Let’s explore the main risks and why they matter:

Demolishing walls or altering load-bearing structures can weaken an existing building.

Structural failures during renovations can also cause accidents.

Insurance can cover repairs if something goes wrong.
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Older properties often have outdated plumbing or electrical systems, increasing the risk of fire or flooding.

A burst pipe or electrical fault during renovations can halt work and cause thousands in damage.
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Renovation sites, especially in urban areas , are prime targets for theft of tools, materials or fixtures.

The right insurance can cover these losses.

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If a worker or visitor is injured on your site, you could face legal claims and other expenses.

Insurance is critical to protect against these costs.
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Unforeseen issues, such as hitting a heritage restriction, can delay your project.

Some policies offer coverage for financial losses due to delays.
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You may uncover hazardous chemicals (e.g., lead paint or asbestos) when renovating older properties.

Safe removal and disposal require specialised handling and without proper insurance, these costs can quickly add up.

Getting insurance with environmental coverage can help manage these expenses.
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Excavation or groundwork during renovations can accidentally hit underground utilities including gas, water or electrical lines, especially in densely built areas.

This can lead to costly repairs and project delays.

Insurance can cover these incidents.

Types of Insurance for Renovation Projects

Choosing the right insurance can be difficult and confusing, but it doesn’t have to be. 

Here are some key types of insurance you can consider for your renovation project:

1. Contract Works Insurance: Covers physical damage to the renovation work, including materials and equipment.
   
   This is essential for protecting against issues due to fire, storm damage or structural collapse.
   
   For instance, if a storm damages your half-built extension, this policy can cover repair costs.
   
   
2. Public Liability Insurance: Protects against claims for injury or property damage caused by your renovation.
   
   This insurance is critical if you’re renovating a commercial space where customers or tenants are nearby.
   
   Say, if a passerby is injured by falling debris, this can cover legal and medical costs.
   
   
3. Home and Contents Insurance (for Homeowners): Standard Home Insurance may not cover renovations, so check with an insurance broker to ensure your policy is updated.
   
   Some insurers offer extensions for renovations, covering the existing structure and new additions.
   
   
4. Professional Indemnity Insurance: Relevant for architects, designers or contractors involved in your project.
   
   This can cover errors in design or advice that lead to financial losses, such as a miscalculated structural plan.
   
   
5. Workers’ Compensation Insurance: This is often required if you have employees working on the project.
   
   This covers medical costs and lost wages for workers injured on-site.

Quick Tip: An insurance broker can assess your project’s scope, whether it’s a kitchen remodel or a full office fit-out, and recommend the right mix of policies for optimised protection.

Tips for Choosing Insurance that Fits Your Renovation Risks & Needs

To ensure your renovation project is properly covered, you can follow these practical steps:

1. Work with an Insurance Broker: An insurance broker can compare policies from multiple insurers to find the best coverage for your budget and project.
   
   
2. Disclose All Details: Be upfront about your project’s scope, including the age of the building, materials used and any heritage restrictions.
   
   This helps avoid claim denials later.
   
   
3. Check Contractor Coverage: Ensure your builders and tradespeople have their own insurance, such as Public Liability and Workers’ Compensation, to avoid gaps in coverage.
   
   
4. Review Policy Exclusions: Some policies may not cover specific risks, like asbestos removal or heritage restoration.
   
   Your broker can clarify these details.
   
   
5. Plan for Delays: Consider policies that cover financial losses from delays, especially for commercial projects where downtime affects revenue.

Start Your Stress-Free Renovation Projects Now

Renovating an existing structure is a big investment, and the right insurance can keep it stress-free. 

Whether you’re a homeowner refreshing your terrace or a business owner upgrading a commercial space, our team at Tank Insurance is here to assist you. 

Contact us now to discuss your renovation project and find insurance that covers the unique risks of working with existing structures. Let’s make your vision a reality.