Contract Works – What It Is – How It Works?

Contract Works cover is available as a stand-alone policy, however it would be more common to find it covered as a section of a Contractors All Risks policy.

Contractors All Risks (CAR) – is an insurance policy that provides cover for damage to property. This damage could include a structure not being properly built or receiving damage during a renovation.

A Contractors All Risks policy is made up of 3 main sections:

  • Contract Works
  • Own Plant and Equipment
  • Hired in Plant and Equipment

Today we will be explaining Contract Works.

What is it?

The Contract Works includes both the permanent works including unfixed materials, and the temporary works on-site anywhere in the UK including in transit by road, rail and inland waterway. Cover would apply throughout the course of construction until handed over by the contractor to the principal or employer on practical completion, and many policies also provide some cover during the maintenance or defects period of the contract.

What is covered?

  • The risk of damage to property which is in the process of construction or alteration.
  • New materials; from delivery, through the construction process and all the way to final testing and hand-over to the party commissioning the work (the employer).
  • Plant and site huts used in the construction process.

It does not cover pre-existing structure that may be being altered, unless the policy is extended to do so. Insurance for the existing property is normally provided by the employer’s own Buildings insurance policy.

The Permanent Works

Permanent Works are the main subject matter of the contract, such as the house, shop or factory which is being constructed.  Permanent Works will also include any unfixed materials, such as copper pipes or UPVC windows, which have been delivered to the site for use in the building works and being kept at either the contract site or on the premises of suppliers and sub-contractors.

The Temporary Works

The Temporary Works are site installations which are not part of the project, but are required to facilitate its building. Examples include site huts, access roads and scaffolding.

The cover

Insurers are usually required to provide All-Risks cover to meet the insured’s obligations stipulated in the contract.


How cover is provided

Cover can be arranged as follows:

  • On a specific contract basis for a particular project
  • On an open cover basis for a contractor covering all jobs carried out in a year within the work parameters agreed with insurers. This provides automatic insurance for all contracts of agreed types below a stipulated limit, although insurers may want referral of individual jobs above a lower threshold purely for information.
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