What does Construction Insurance Cover?
Construction insurance provides cover for risks encountered during the building or renovation process including fire, storm, impact, wind and water damage, malicious damage, theft including materials in the open air and Public Liability. The policy also provides cover for professional fees, demolition and removal of debris costs following a claim.
Warning
You must check with your household insurer to determine if your policy still protects the existing structure during the period of the renovation or extension. You should advise your Household Insurer of the estimated cost of the work you will be carrying out and obtain confirmation in writing from your insurer if they agree to provide cover. We are NOT able to provide cover for your contents.
Do you wish to build it again for nothing?
Reducing your estimated construction cost to obtain a lower premium could cost you many thousands of dollars in the event of a major claim. We recommend you insure for the full replacement value to ensure your sum insured will be sufficient to provide enough money to pay a builder to rebuild after a claim.
Existing Structures when Renovating or Extending
We can insure your existing home during the renovations or extensions to your dwelling as an existing structure on your contract works insurance. Generally, your existing home insurer will not cover your existing structure/s (i.e. house) during the course of major renovations or additions.
A major trap is underinsuring the project.
The construction policy should cover the replacement value of the works, not just your construction costs which doesn’t take into account your time, labour and the “sweat equity” that you put into the project.
What does Public Liability Insurance cover?
Public Liability Insurance covers third party personal injury and property damage that occurs during the period of the policy for which you are legally liable. Owner builders are responsible for site safety and co-ordination of their building works.
It is vital that you take out public liability insurance, because you could be sued for hundreds of thousands of dollars if someone is injured at or near your building site caused by your negligence. This also covers damage to other people’s property.
Is Construction and Public Liability Insurance compulsory?
As a general rule, the insurance is not compulsory, however it would certainly be prudent to have this cover. Some councils require you to have a Public Liability policy before they will allow works to commence. If finance is being obtained, the financier will require evidence of a construction and public liability policy. You should have their name noted on the policy. We can arrange this at no additional charge.