What Can Go Wrong on Site? 7 Risks Builders Risk Insurance Covers

When you’re working on a construction site, even a small setback can quickly turn into a major issue. From accidental damage to theft and legal liability, the risks builders face every day are significant. That’s where builders risk insurance – also referred to as contract works insurance – is essential.

Builders risk insurance is a form of construction insurance that covers the cost of physical loss or damage during building work. Whether you’re a sole contractor or managing a multi-stage commercial build, having a policy that protects your works, materials, and equipment is critical. At Atlantic Insurance, we help builders and tradies secure tailored cover that reflects the real-world risks of each job site.

Here are seven common issues builders risk insurance can help protect against — and why it’s a vital part of your insurance package.

1. Fire or Storm Damage to Structures and Materials

Natural disasters such as bushfires, hail, or severe storms can severely impact building sites. Damage might occur mid-construction, with timber frames, roofing and unfinished interiors all vulnerable. Builders risk insurance covers the cost to repair or replace damaged property, so you’re not left footing the bill. Atlantic Insurance ensures your policy includes weather-related risks specific to your location and construction period.

2. Theft of Tools of Trade and Materials

Construction sites are often targeted by thieves, especially after hours. Stolen tools of trade, electrical gear, or supplied materials can halt progress and cost thousands to replace. A solid insurance cover arranged by Atlantic Insurance ensures your project continues without long delays. We’ll help you protect against malicious damage and unauthorised access, so you can get back on the tools fast.

3. Water Damage and Rain Ingress

Water damage is one of the most common claims in building and construction. Rain ingress through unsealed openings or faulty drainage can cause internal property damage before handover. Atlantic Insurance clients benefit from builders insurance policies that include protection against storm-related water issues. We make sure your construction insurance covers these risks during each stage of the build.

4. Legal Liability from On-Site Incidents

Sometimes, things go wrong — a passerby injured near your site, or a third-party vehicle damaged by falling materials. Section 2 of a Contract Works Policies provides liability insurance to help cover legal expenses and liability claims. It’s important to speak with your insurance broker to ensure your package includes protection for legal liability.

5. Damage to display Homes

Many residential home builders utilise display homes as a marketing strategy to sell to prospective customers. Most Contract Works Policies can be extended to provide cover for damage to these display homes.

6. Loss or Damage to Materials in Transit

Before materials reach the site, they’re exposed to risk in transit. From glass panels to framing supplies, damage during delivery can stall progress. Contract works insurance may include optional coverage for materials offsite or in transit. At Atlantic Insurance, we tailor coverage to account for project stages — from supply chain through to final handover.

7. Damage to Existing Structures

There is often a misconception that existing Home or Commercial Insurers will provide cover to existing structures during major renovation or building works. These policies often have exclusions where cover is excluded during major works. Existing Structures can be added to Contract Works Policies to ensure these existing structures remain covered ensuring no gap in cover.

Why Atlantic Insurance Recommends Builders Risk Insurance

Builders risk insurance doesn’t just protect physical structures — it safeguards your timeline, your income, and your reputation. It also complements other critical covers, such as public liability and insurance for tools and equipment. For tradespeople, contractors, and project managers alike, it’s a smart investment in business continuity and peace of mind.

Atlantic Insurance understands that no two construction projects are the same. That’s why we work closely with you to assess site risks, explain your policy wording, and ensure your cover extends to the things that matter most — your work, your tools, your people.

From residential builds to commercial renovations, our expert team supports businesses across Australia with comprehensive construction insurance solutions that are transparent, flexible, and affordable. We’re here to help you understand your obligations, reduce your exposure to risk, and meet the insurance needs of today’s fast-moving construction industry.

Get a quote today from Atlantic Insurance and secure builders risk insurance that protects your site, your tools, and your livelihood — with no hidden costs and full local support.