In the Building and Construction industry, there are both recommended and required insurance policies that you can put in place to protect your Assets and Liabilities. With a variety of insurance companies and policies available, it can be difficult to determine which may be the most appropriate for you.
When it comes to Builders’ Insurance, there are a variety of policies suitable for a range of building work. Understanding the various types of policies that are available and which ones may be right for your circumstance is crucial to ensure you are paying competitive premiums for a broad level of cover and most importantly protect yourself in the event of loss or damage.
Adequate Insurance cover should provide a level of protection that will ensure continuity of your business following an insured loss.
Selecting the right policy will mean you can get back to work as soon as possible after a loss. The most common insurance requirements for Builders are explained here.
The three main insurance policies for Builders
According to the Victorian Building Authority, there are three main types of insurance for Builders that should be considered. These three insurance types may all be necessary for registration and by your customers. At a minimum, the VBA will require evidence that you have Domestic Building Insurance Warranty cover in place to obtain or renew your Building Licence.
The three main insurance types for registered Building Practitioners include:
1. Domestic Building Insurance
Domestic Building Insurance is a requirement if you are undertaking certain building projects that are worth more than $16,000. This policy covers the client if covered circumstances affect the Practitioner before the work is complete. It covers costs up to $300,000 towards fixing structural defects for six years, or any non-structural defects for two years after construction ends.
To renew their registration, Builders must provide evidence that they are eligible to purchase this insurance policy in the form of a ‘Certificate of eligibility to purchase Domestic Building Insurance’. This is prepared by the insurer.
Before accepting a deposit or any money, Builders must provide a copy of the policy as well as a certificate of currency covering the client’s property.
2. Professional Indemnity Insurance
Professional Indemnity Insurance is required for a range of Practitioners to protect against legal liability resulting from claims made as a result of Professional Negligence. This is necessary for registration of Building Surveyors, Building Inspectors, Quantity Surveyors, Endorsed Building Engineers and Draftspersons.
Builders will need to show evidence of this insurance and ensure they have this cover for all building work that is carried out.
3. Public Liability Insurance
Builders and any Erectors or Supervisors will also need Public Liability cover. This protects the Building Practitioner against any legal liability that results from claims made against them regarding personal injury or property damage to a third party.
Other important considerations
Construction Insurance is another class that offers excellent cover for Contract Works, including Material Damage and Public and Products Liability. This policy can be extended to include cover for other unique building risks. This coverage essentially provides protection for assets during the construction period, and can include Public Liability coverage in the same policy.
The Material Damage element of this policy insures against physical damage to the works under construction, any materials that are used for the project either on or off-site, any temporary structures, hired plant and equipment and the contractor’s own plant and equipment.
It is recommended that all trades clients consider a Management Liability policy. This is an excellent method of providing Directors, Officers and Employees of the business protection against claims of negligence.
Plant and Machinery cover can also be useful to protect against theft and damage or third party liability for registered items, along with Tools Insurance which covers your tools for circumstances of accidental loss, damage or theft.
Atlantic Insurance is here to assist
If you are unsure what Builders’ Insurance may be required for your specific business, our expert Client Managers can help. At Atlantic Insurance we provide competitive insurance, with a strong understanding of risks in the Building industry that allows us to put together tailored insurance plans.
We have been looking after the insurance needs of Builders and Property Developers for the past 25 years, and can assist to secure an effective solution that reduces gaps in coverage.
Contact our friendly team to learn more about the comprehensive cover we can offer your business.
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. Your 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.
