Following the Sky City hotel fire and other high profile losses, there has been a lot of discussion regarding potential liability claims for sub-contractors.
For any new construction or renovation type projects, a Contract Works insurance cover will be required. This will cover the work in progress plus the existing building (if any) and repairs needed to fix damage resulting from an insured event such as fire, natural disaster, vandalism or theft. Cover may also include the cost of the labour, materials and tools to get the project back to the stage it was at before it was damaged.
Contract Works insurance is usually arranged by either the building owner or the head contractor and cover does not automatically extend to sub-contractors.
If you are providing sub-contracting activities to another contractor, we recommend you review the Contract Works insurance held by the head contractor and make sure sub-contractors are named and the contract includes cover for all sub-contractors respective rights and interests. This will ensure you remain a named party to the contract works cover and retain the liability protection this provides.
You may also want to increase your general Public Liability cover to the value of the entire building for the duration of this project to provide some added protection relating to a loss caused by your business and unrelated to the actual construction work.
We also note that we can only insure stock and materials that you own and as such have an insurable interest in. If you are working on a project where materials are supplied by the building owner or the head contractor, they will need to arrange insurance cover for them even if they are stored at your premises awaiting installation. You may have limited insurance for property under your care, custody and control but this only provides cover where you are proved negligent and does not provide cover for unrelated damage, burglary, theft etc.
Please contact us if you have any questions regarding your insurance requirements.