What Is Contract Works Insurance for Tradesmen?

What counts as the works under a contract works policy?

The works are everything you are contracted to build, install or alter on that job, plus the materials brought to site for it. Once an item is incorporated into the building, it stays part of the works.

Work in progress

Half-built walls, a partially tiled roof, first-fix pipework and plaster that has not yet cured are all work in progress. If a storm flattens them, the policy pays for the materials and the labour to put them back.

That labour element is the part tradespeople miss. A bricklayer who loses three days of blockwork is out the blocks and the three days.

Materials and unfixed goods on site

• Bricks, blocks, timber, plasterboard and insulation stacked awaiting installation.
• Cable, pipework, fittings, sanitaryware and boilers delivered but not yet fitted.
• Windows, doors, worktops and made-to-measure joinery waiting to go in.
• Aggregates, screed and mortar stored in bags or bulk on the plot.

Temporary works that serve the job

Hoardings, site fencing, propping, formwork and temporary access are usually treated as part of the works while they support the contract. Scaffolding you have hired in is more often handled under a hired plant extension.

Check which of the two your wording uses. The distinction only surfaces when something falls over.

When does contract works cover start and stop?

Cover normally runs from the moment you take possession of the site or your materials arrive, and ends at practical completion or handover. That end date is the single most important line in the policy.

Why practical completion is the trigger

Until the works are handed over, they are still yours to reinstate if something destroys them. After handover, they become the building owner’s property and their insurance problem.

Sites are risky places right up to that point. HSE construction guidance sets out why fire, collapse and weather exposure sit at their worst while a structure is open and unfinished.

Sectional completion and phased handovers

On a phased job the client may take parts of the works early. Each handed-over section normally drops out of your cover on its own date, not on the final one.

Tell the insurer when a contract is phased. A single completion date on the policy will not match what is happening on site.

Snagging and the period after handover

Returning to fix snags does not automatically bring the finished works back under cover. Damage you cause during that return visit is usually a liability question instead.

Longer defects and maintenance periods are handled by wider contractors’ all risks packages rather than a standalone works section.

How do you set the sum insured for contract works?

Insure the full reinstatement cost of your largest single contract, materials and labour together, not the profit on it. Annual policies then apply that figure to every job you run in the year.

Per-contract versus annual cover

A single-contract policy is written for one job and one duration. An annual policy carries a maximum contract value and covers everything you take on beneath it.

Most jobbing trades are better served by annual cover, because it removes the risk of forgetting to arrange a policy before a job starts.

Include labour, not just materials

Reinstatement means paying people to do the work again. A sum insured that only reflects material cost will fall short by whatever your labour is worth.

A roofer stripping and relaying a roof carries far more labour than material value, which is exactly the case where the figure gets set too low.

What happens if the figure is too low

The insurer can apply average and scale the settlement down in proportion to the shortfall. On a partially completed job, that leaves you funding the difference at the worst possible moment.

What is excluded from contract works insurance?

Existing structures, defective workmanship, defective design, wear and tear and your own tools all sit outside a standard contract works section. Terrorism is commonly excluded as well.

Existing structures are the big one

On an extension or a refurbishment, the house you are working on is not part of the works. If your fire spreads from the new build into the original property, the works section does not respond.

Some insurers sell an existing structures extension. Where the client’s own buildings policy will not cover contractor damage, that extension is worth pricing.

Defective workmanship and defective design

Contract works pays for damage to the job, not for redoing work that was wrong in the first place. A wall that falls because it was badly built is a quality failure, not an insured loss.

Some wordings pay for damage the defect causes to other parts of the works while still excluding the faulty element itself. That distinction is worth reading before you buy.

Tools, plant and third-party claims

• Your own hand and power tools belong on a tools section, not on contract works.
• Owned and hired-in plant needs its own plant cover or a wider package.
• Injury to anyone on or near the site is a public liability claim.
• Damage to a neighbour’s property is public liability too, not contract works.

Why does public liability not cover the works?

Public liability answers claims made against you by other people. The works in progress are your own contractual responsibility, so there is no third party to bring a claim.

Your own property versus somebody else’s

If your ladder goes through a client’s window, they claim against you and public liability responds. If a gale takes down the roof structure you are halfway through, nobody is claiming against you at all.

The ABI notes that public liability is not legally compulsory in the UK for tradespeople, the only exception being horse riding establishments, yet contracts demand it almost everywhere.

How the two sections work together

Most builders carry both, alongside tools and employers’ liability. A public liability policy deals with the outside world while contract works deals with the job itself.

The two rarely overlap and never substitute for each other. Understanding what public liability insurance covers makes the boundary obvious.

Who insures materials you have not been paid for?

Usually you do, because the works remain your risk until handover whatever the payment schedule says. Free issue materials supplied by the client are a separate question and often need declaring.

Free issue materials

Free issue means the client buys the goods and you install them. You do not own them, but you are generally responsible for them once they are in your care on site.

Most insurers will include free issue materials in the sum insured if you ask. Very few include them silently.

Off-site and in-transit materials

Goods stored in your yard or a hired container before delivery are often outside a works section that is defined by the site address. The same applies while they are on the back of a van.

A carpenter storing made-to-measure units at home for a fortnight before fitting needs to know which policy is carrying them.

Standard contracts and who carries the risk

JCT and similar standard forms allocate the insurance duty for the works explicitly, sometimes to the contractor and sometimes to the employer. Read the insurance clause before you price the job.

What site security does the insurer expect?

Theft and vandalism cover almost always comes with conditions about fencing, locking up and storing attractive materials. Failing them can reduce or void a claim.

The conditions that turn up most often

• Perimeter fencing or hoarding in place and closed outside working hours.
• Loose materials stored in a locked container, cabin or the completed structure.
• Copper, cable, lead and boilers kept out of sight and secured separately.
• Keys removed from the site and not left in a lock box on the hoarding.

Why theft claims get reduced

Insurers look for forced entry and for evidence that the security condition was met on the night. An open site with materials stacked against the fence rarely clears that test.

Photograph the lock-up at the end of each day on higher-value jobs. It takes seconds and it settles arguments later.

How do you claim on contract works insurance?

Tell the insurer straight away, photograph everything before you clear up, and get the police involved for theft or vandalism. Then evidence what was on site and what stage the job had reached.

The first twenty-four hours

• Notify the insurer or broker before starting any clearance or repair.
• Photograph and video the damage from several angles, wide and close.
• Report theft or vandalism to the police and get a crime reference number.
• Make the site safe, but keep damaged material until the insurer releases it.

The records that prove the loss

A site diary, delivery notes, supplier invoices and dated progress photographs let a claims handler value the works quickly. Without them, the settlement is an argument about what was there.

A builder who photographs progress weekly settles a storm claim in a fraction of the time it takes somebody working from memory.

Checking the insurer behind the policy

Before you buy, confirm the insurer or broker is authorised on the FCA Register. Contract works claims are large, and you want to know exactly who is standing behind the wording.

Money.co.uk publishes a worked quote of £66.88 a month for a trade business on £250,000 turnover with contract works included, and how much tradesman insurance costs in the UK puts that in context against simpler packages.