The construction industry is as diverse as the risks they face. It spans residential and non-residential construction, renovations and extensions, site preparation, land development, building structure services, installation services, and heavy and civil engineering.
That’s a lot of risks your construction business needs to manage, so here are five insurance policies popular with construction companies. In this article, we’ll explore construction works, product and public liability, business vehicles, material damage, and workers’ compensation.
Construction works insurance
Also known as contract works, construction works insurance provides cover for builders, tradespeople and subcontractors against accidental physical loss or damage to their build project during the construction period. It also includes cover for material damage and legal liability.
It covers the build project from risks including:
- Malicious damage
- Accidental damage
Typically, builders are under contractual responsibility to insure the works during the construction period. Additionally, proof of construction insurance is usually required by financiers of construction projects before they will make payments.
Product and public liability
Product and public liability cover is usually packaged together in a single policy, and can be combined with material damage. You’ll often need public liability insurance as part of your contractual agreement, but it also makes good commercial sense. It will cover your legal liability for third-party personal injury or property damage that happens due to your negligence arising out of or in connection with your construction activities. Even if your company isn’t to blame, defending a negligence claim can have a substantial financial impact upon your business if it’s uninsured.
Most small business policies offer standard liability insurance, but for those with larger risks, customised cover offers more appropriate cover. Ensure your liability cover has been designed with the construction industry in mind. Construction liability insurance can be complex, so consult with us, so you have peace of mind it suits the nature of your business.
Cover for your business vehicles
For construction businesses, full comprehensive commercial motor vehicle insurance is a must-have cover. It offers protection for your commercial cars, trucks, trailers, utes, etc, including:
- Vehicle replacements if required
- Car hire such as in emergencies
Damages to additional accessories in your company vehicle
- Towing your damaged vehicle
- Damage or loss of advertising or other branded sign writing or material that are permanent areas of your vehicle.
Importantly, comprehensive motor vehicle policy will pay for damage to your vehicles whether the other party is insured or not. Good to know that if you’re not at fault, and can identify the other driver, often there’ll be no effect on your excess or no-claim bonus.
Another consideration is having third-party property (damage) insurance. It covers other people’s property that you or your staff have damaged using your commercial vehicles. It won’t cover the costs of damage to your vehicle, though. That’s why you’d opt for this cover if your business can manage the costs for damages to its own vehicles. You can also ask for extra cover under this insurance for times you’re not at fault in an accident with an uninsured driver whose vehicle is damaged.
Another very useful insurance is general property or ‘tool’ insurance, as tradies would know it. It protects your business tools against various events, which could include:
- Damage from a fire or storm, rollover, or vehicle collision
- Theft following forced entry – some policies have ‘without forced entry’, i.e., if the gear is in the open air
- Accidental damage
We’ll guide you through the cost differences for such a policy. It depends on your business type, the property’s total value, and geographical location. Keep digital evidence of your receipts so you can prove ownership when you’re making a claim.
Every business with employees must take out workers’ compensation insurance to protect them, but check your state or territory’s authority for the particular requirements. In short, it’s insurance to pay your employees if they’re injured or become ill at work. It means they’re paid wages while their condition stops them from working and have their medical expenses and rehabilitation covered.
Construction companies must take out workers’ insurance for deemed workers as well. They are ‘deemed’ to be employees for works’ insurance purposes and include salespeople, collectors, and contractors under labour hire service agreements.
We can advise you about the best-fit cover for your construction business, including packaging your cover to meet your specific business needs.
This content is created and provided by Finnigan Investments (Australia) Pty Ltd trading as OneAffiniti on behalf of Austral Risk Services, and is for commercial purposes. Any financial product advice in this content is provided by Austral Risk Services AFSL No. 244369. This material is general in nature and has been prepared without taking into account your objectives, financial situation or needs. Accordingly, before acting on it, you should consider its appropriateness to your circumstances.