Contractors' all risks insurance, explained without the jargon

Imagine a storm brings down a half-built gable. Nobody else was hurt. Nothing that belonged to a neighbour was touched. Public liability is unlikely to help, because the damage is to your own work.

That gap is what contractors' all risks is for. You may also see it sold as contract works insurance.

What it generally covers

• The permanent works while they are being built.
• Materials on site waiting to be used.
• Temporary works such as hoardings.
• Sometimes plant, tools and site huts, if added.

Typical causes include fire, storm, flood, theft and vandalism. As the name suggests, the policy is broad. It still has exclusions, so 'all risks' never means everything.

Common exclusions to check

• Faulty design or workmanship itself.
• Wear and tear.
• Work left unsecured or unattended beyond a set period.
• Damage after handover.
• Asbestos, which is also excluded from many liability policies.²

Who should buy it?

Your contract decides. Building contracts often state whether the employer or the contractor must insure the works. Read that clause before you price the job. If it falls to you, include the premium in your quote.

Getting the sum insured right

Insurers usually ask for your annual turnover or the largest contract value. Be accurate. Under the Insurance Act 2015 you have a duty to make a fair presentation of the risk.¹ A wrong figure can cause trouble when you claim.