Are you doubling up if you have builders’ risk and general liability insurance?
With builders’ risks escalating and an increasingly tougher regulatory environment across Australia, how can construction contractors protect against potential liabilities and losses?
General liability policies may not be tailored to the unique risks of the construction industry hence why specific ‘contractors or builders liability insurance’ is a better option.
While public liability insurance covers liability for injury or damage arising from building activities, it doesn’t cover the tangible assets of your business (such as property or tools, for which you may need General Property & Tools of Trade Insurance).
So do you need both builder’s risk and contractor’s general liability insurance or just one of them? Usually, they are sold as a bundled policy; here’s why.
What is builder’s risk insurance?
Builder’s risk, also known as construction works, covers your property, material and equipment for a building or project you’re constructing, whether it’s a new build, restructure, remodelling or installation. You’re covered from groundbreaking until completion when the owner signs off. It might seem complex, but it can be customised to your particular project or part of your annual policy, so it underpins your risk management approach.
Usually, this type of policy covers damage to your property from external events not related to construction work, such as:
- Lightning, hail or storm
- Fire or explosion
- Vehicle or aircraft collision
You can opt for extra cover for flood, earthquake or wind damage, so consider the potential for weather-related peril at your site’s location. However, all insurance policies are subject to conditions & exclusions so it’s important to obtain tailored advice – which we can help you with.
You might also need an installation floater which covers the cost of materials to be installed onsite. Other options include cover for scaffolding, temporary structure, or the costs of removing debris.
Does it differ from contractor’s general liability cover?
Contractor’s general liability insurance has more of a focus on people visiting your site or other contractors on site who are not your employees, but not for injury to your employees. Contractor’s general liability protects you against claims arising from third-party injuries and property damage such as:
- Injury to customers or site visitors (resulting in medical bills, lawyer fees, court-ordered judgements, settlements, even funeral expenses for fatalities) arising from building activities
- Property damage, including that of your customer
- Liabilities from possible accidents
- Legal costs in defending allegations of negligence
Do you need both policies?
While there’s some misconception that these policies are interchangeable, if you want to cover all potential construction risks, it’s recommended to have both.
And, if you’re an owner-builder, you need to know your range of risks. You’re responsible for workers, visitors and subcontractors to the site, including if they’re injured there. Each state or territory has varying insurance needs, which could include:
- Public liability insurance
- Workers’ compensation
- Personal accident and injury insurance
- Construction insurance
- Voluntary works, which cover your friends or family members working gratis onsite.
So, check with us about the needs of your construction business or project and we can tailor an insurance package fit for you.