Who requires Contract Works cover?

Builders are not the only people who require contract works insurance.  There are many different types of businesses or individuals that will buy a construction policy for many different reasons depending upon their circumstance.

These include but are not limited to: 

  • Sub-contractors (plumbers, electricians, concreters etc.)
  • Engineering Businesses
  • Property Owners/Property Trusts (Principals)
  • Government Entities and Local Councils
  • Business Owners (through own business related capex or expansion)
  • Project Managers

Anyone who is building, erecting or installing something may have a requirement for contract works insurance.

What are the reasons why someone other than a builder/contractor would arrange construction insurance? 

  • Contractual requirements
  • Control of insurance placement (cover and pricing)
  • Complexity of project (multiple contactors)
  • Existing property cover requirements

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It says Directors & Officer's Side A, Side B and Side C cover has been chronically underpriced since at least 2011, while the frequency of class actions is increasing as more plaintiff lawyers and litigation funders enter the space.

The analysis suggests last year’s overall premium pool of about $210 million would need to increase by at least three times to establish a profitable market, if it is assumed all other factors stay unchanged.

“Recent market developments would indicate most D&O insurers are now endeavouring to restore some semblance of profitability to their portfolios after years of market losses,” the report says.

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