Understanding Contract Works Insurance: Do You Really Need It? - HMIS Heavy Motor, Mobile Plant & Machinery Insurance Solutions

When you’re working on site, out in the field or on the road, plenty of things can go wrong.

Damage or loss to any tools, equipment, buildings or machinery could cost you time, money and even your reputation. And an onsite injury can result in considerable pain, stress and financial loss.

That’s why having the right amount and type of contract works insurance is an important part of your business toolkit, allowing you to get on with the job with less stress and worry.

Who Should Consider It?

Contract works insurance is recommended for small, medium and large commercial, industrial and domestic trades, sub-contractors and business owners.

Some business owners take out contract works insurance for a specific contract, while others choose an annual policy that covers multiple contracts.

What Can It Cover?

Let’s take a construction company for example.

Contract works insurance can cover the building which is under construction, whether it’s a kit home, straw bale or mud brick home, multi story apartment or commercial buildings.

It can also cover the equipment used in construction, as well as public liability risk. During renovations to an existing structure, it can cover damage to the structure which occurs during the construction process.

Type of Cover	Potential Benefits
Property damage	Physical loss or destruction of tangible property, plant and equipment as well as removal of debris
Public liability	Sub-contractor liability, products liability and cross liability.
Product liability (only available from some insurers)	Third party personal injury or property damage resulting from an occurrence caused by your products after they cease to be in your possession or control.
Legal expenses/defence costs	Legal costs and expenses you are legally liable to pay following legal proceedings brought by or against you.
Existing structures (optional cover)	Sudden and accidental physical damage to existing structures caused by natural events and the actions of the builder or contractor.

What Usually Is Not Covered?

Exclusions, the excess you need to pay and limits of liability can vary greatly depending on your insurer.

Policies generally won’t include cover for:
Loss after work has ceased for more than the number of days specified in the policy
Consequential loss
Cost of rectifying or correcting defective workmanship
Work underground or in water unless specifically agreed by the insurer

Case Study

Let’s look at a case study of one of our clients Craig, who recently started a small earthmoving company.

In the first couple of years, he borrows money and invests much of his income back into the business, buying the latest equipment and a work vehicle.

After starting work on a new construction at a new site, he leaves his tools and equipment locked in a garage on the site overnight.

Unfortunately, thieves break into the garage and steal Craig’s tools, worth $25,000.

Craig contacts his HMIS broker who helps him put in a claim.

He’s quickly reimbursed for his loss, so he isn’t out of pocket and can keep his business running.

Need more help?

Does your insurance policy include Contracts Works? Get a free review of your insurance policy and talk to the team at HMIS today on 1800 629 701