Construction insurance protects the project you are working on against unforeseen circumstances. As a construction worker, insurance during construction will depend on the type of project, the building contract and state or territory laws. Insurance in construction is designed to keep your construction business, employees, and any third parties or affiliated persons safe. Learn more about building construction insurance and the factors influencing premiums.
What is Construction Insurance?
Also known as contract works insurance, construction insurance can be a legal requirement and often contractually required for persons who undertake construction work to provide necessary protection during construction projects. Construction works insurance is designed to cover a range of risks during the construction period and can cover the following persons:
- Contractors
- Subcontractors
- Project owners
- Builders, andÂ
- Others who are involved in the construction industry.Â
Construction insurance can provide cover for legal liability, including public and product liability insurance and material damage. This type of insurance can be an annual policy or specific to each project. Atlantic Insurance has been looking after the insurance needs of Builders and associated Trades for over 25 years.
Key Factors that Influence Construction Insurance Premium
The cost of construction insurance can affect your project’s bottom line. This can affect your ability to bid competitively on projects and impact your project’s overall risk management strategy. Understanding what influences building construction insurance can help you determine which insurance policies are the best for you.
Type and Scope of Construction Project
Larger construction projects typically involve more materials, workers, and potential risks, which results in higher insurance costs. For example, a multi-storey commercial building may be more expensive to insure than a single-storey residential building.
The types of construction insurance you will need to get include:
- General liability
- Workers compensation
- Builder’s risk, and
- Professional IndemnityÂ
Location of Construction Project
If the location is prone to high crime rates or natural disasters, insurance costs will be higher than in locations where less risk is evident. Some states and territories have more stringent safety and building regulations than others, which will also impact the construction project premiums.
Design of Construction Project
You may face higher construction insurance costs if your construction project has an innovative design or uses unconventional materials. This is due to the increased risk of material failures or design flaws, which will require specialised construction insurance solutions. For instance, a multi-storey commercial development using high-grade materials, state-of-the-art designs, and sophisticated building techniques will have greater risk than a simply designed office block that uses standard building techniques and materials.
Risk Profile of the Project
Some projects can be considered high-risk because of site hazards, construction techniques, or the nature of the work undertaken. The probability of insurance claims becomes greater if there is an increased likelihood of damages, accidents, or losses.
Your Building Experience and Claims History
Your insurance claims and safety record history will also impact the construction insurance premiums. To gauge your risk management practices, insurers will assess your safety record. You have a low risk of future claims if you have a strong safety record, few or no workplace accidents, and adopt strict safety regulations.
Insurance Provider and Market Conditions
Prevailing market trends and your chosen insurance provider will also impact your construction insurance premiums. Different insurers specialise in certain types of insurance for construction, and some offer more competitive rates than others.
Reliable Construction Insurance with Atlantic Insurance
Your construction insurance needs will change as your business grows. Regularly reviewing your insurance policies is vital to ensure they align with your current needs. Atlantic Insurance brokers have been insuring the construction work of our building construction clients for decades. Our skilled client managers work hard to understand your insurance requirements and will develop a tailored plan. Atlantic is the preferred choice for many trade businesses for comprehensive coverage. Contact us today to discuss your requirements and receive a quote.Â
Any information contained on this page of the website is general advice only and has been prepared without taking into account your objectives, financial situation or needs. You should consider these, having regard to the appropriateness of this advice and the relevant Product Disclosure Statement (‘PDS’), Target Market Determination (‘TMD’) and Financial Services Guide (‘FSG’), which will be provided following any formal recommendation to you.Â