What is Contract Works Insurance?
Contract Works Insurance (often referred to as Construction Insurance or Builders Risk Insurance) covers the physical structure being built and the materials on-site against loss or damage during construction.
It is designed to bridge the gap between a standard property policy and a public liability policy. It ensures that if a project is damaged by an insured event—such as fire, theft, or severe weather—the builder or project owner has the funds to repair or redo the work without suffering a financial loss.
Most policies are divided into two main sections:
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Material Damage Covers the physical works, materials, and equipment.
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Public Liability Covers legal liability for third-party injury or property damage.
Secure Your Project from Ground Breaking to Handover.
Construction sites are high-risk environments. Whether you are running a single renovation or managing a portfolio of commercial builds, you need coverage that accounts for the specific risks of your scope of works.
At Tank Insurance, we negotiate with leading insurers to secure tailored policies that protect your bottom line.
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What is Contract Works Insurance?
Contract Works Insurance (often referred to as Construction Insurance or Builders Risk Insurance) covers the physical structure being built and the materials on-site against loss or damage during construction.
It is designed to bridge the gap between a standard property policy and a public liability policy. It ensures that if a project is damaged by an insured event—such as fire, theft, or severe weather—the builder or project owner has the funds to repair or redo the work without suffering a financial loss.
Most policies are divided into two main sections:
-
Material Damage Covers the physical works, materials, and equipment.
-
Public Liability Covers legal liability for third-party injury or property damage.
Who Needs Contract Works Insurance?
Any entity with a financial interest in a construction project should hold this cover.
Licensed Builders
For residential and commercial projects.
Owner-Builders
Homeowners managing their own renovations or new builds.
Property Developers
Managing multi-unit or commercial developments.
Subcontractors
Trades needing own cover or proof of inclusion in principal policy.
Project Financiers
Banks often require proof of insurance before releasing funds.
If you are renovating an existing structure, your standard home and contents insurance will likely not cover the renovation work. You require specific construction insurance.
What Does Contract Works Insurance Cover?
A robust policy is designed to cover the cost of restoring the project to the stage it was at immediately prior to the damage.
Standard Inclusions
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Natural Disasters
Storm, wind, hail, flood (check specifically for flood definitions), and cyclone damage.
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Fire and Explosion
Damage caused by fire or on-site explosions.
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Theft and Vandalism
Burglary of materials (e.g., copper wiring, timber) and malicious damage.
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Accidental Damage
Unforeseen physical damage to the works.
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Demolition & Removal
The cost to clear the site after an insured event so rebuilding can commence.
Common Exclusions
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Faulty Workmanship
Costs to rectify poor building work or defective design are generally excluded.
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Wear and Tear
Gradual deterioration or rust.
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Consequential Loss
Financial losses due to project delays, unless 'Advanced Loss of Profits' is added.
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Pollution
Unless caused by a sudden, identifiable incident.
Single Project vs. Annual Construction Insurance
We help you decide which structure suits your business model.
Annual Construction Insurance
Best for professional builders & companies
- Covers all projects commenced during policy period
- Based on your estimated annual turnover
- Eliminates admin of insuring every job individually
- Usually more cost-effective for high-volume
Single Project Cover
Best for owner-builders or one-off developments
- Covers a specific site for a specific duration
- Premium calculated on total contract value
- Can be extended if the project runs over time
- Spacer to match height
How Much Does Contract Works Insurance Cost?
The cost of Contract Works Insurance is not a flat rate. Insurers calculate premiums based on the risk profile of the project or business.
Project Value / Turnover
The total cost of the build or your annual revenue.
Scope of Works
A high-rise apartment complex carries higher risk than a single-storey dwelling.
Location
Sites in cyclone or flood-prone areas attract higher premiums.
Construction Method
Timber frame vs. concrete tilt panel.
Excess Structure
Choosing a higher excess can lower the premium.
Get an Instant Estimate
Use our intelligent quoting engine to get a price tailored to your specific project parameters.
Why Use a Broker Instead of Going Direct?
Construction insurance is complex. A "standard" off-the-shelf policy may contain sub-limits or exclusions that leave you exposed during a major claim.
Policy Interpretation
We decode the Product Disclosure Statement (PDS) to ensure you understand what is and isn't covered.
Tailored Endorsements
We can negotiate extensions for testing and commissioning, transit of materials, or existing structures.
Claims Advocacy
If disaster strikes, we manage the claim process, advocating for you against the insurer to expedite settlement.
Market Leverage
Access to specialist construction underwriters not available to the public.
Deep Knowledge
We don't just sell policies; we understand construction.
Fast Turnaround
Certificates of Currency issued quickly so you can get on site.
Claims Support
Dedicated advocacy to get you paid faster.
Why Choose Tank Insurance?
We are a specialist Australian brokerage. We work hands-on with builders and trades every day, ensuring you have the right protection when it counts.
We know project timelines are tight. We move quickly to get your certificates of currency so you can get on site without delay.
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Frequently Asked Questions
Common questions about Contract Works cover.
While not always a legislative requirement for every small job, it is almost universally required by contracts (such as MBA or HIA contracts) between builders and clients. Furthermore, financial lenders will rarely release funds for a build without proof of Contract Works Insurance.
Generally, no. A standard policy covers the new work. If you are extending a home, the existing structure needs to be specifically noted or covered under a separate property policy. We can negotiate "Existing Structures" cover as an extension in many cases.
Yes. Construction delays are common. It is vital that you contact Tank Insurance before the policy expires to arrange an extension. If the policy lapses, getting new cover for a partially completed build is difficult and expensive.
Contract Works Insurance covers materials intended for the build. It typically does not cover your personal tools or plant machinery unless specifically added to the policy or insured under a separate Tools of Trade policy.
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Design &Â construct insurance
Standard Public Liability covers accidents and physical damage, but it does not cover your professional advice.
If you draft plans, modify designs, or manage sub-consultants, you need Design and Construct (D&C) Insurance. Also known as Builders Professional Indemnity, this policy protects your business against claims of financial loss caused by design errors, incorrect specifications, or professional negligence.