Written by Candice Klau, Managing Director, Be Covered Insurance Brokers
Candice has more than 20 years of insurance broking experience and specialises in construction insurance for builders, developers and trade businesses across Australia.
A builder’s insurance needs rarely stay the same from one year to the next.
Your turnover grows. Project values increase. You purchase new equipment. You start tendering for larger commercial projects. Contracts change. You take on different subcontractors or begin accepting design responsibilities.
An annual builder’s insurance review is an opportunity to check whether your construction insurance still reflects the projects you undertake, the assets you own and the risks your business is actually exposed to.
What Should Builders Review in Their Insurance?
A construction insurance review should look beyond simply renewing the same policies each year. Builders should consider whether anything has changed across their:
- Turnover and wages
- Project sizes and contract values
- Types of construction work
- Design responsibilities
- Plant, equipment and tools
- Employees and subcontractors
- Business locations
- Contractual insurance requirements
- Claims history
1. Has Your Turnover Increased?
Business growth can change your insurance exposure. If turnover has increased significantly since your last renewal, make sure the figures declared to your insurer still reflect the size and activities of the business.
- Number of projects
- Average contract value
- Size of workforce
- Use of subcontractors
- Types of clients
2. Are You Taking on Larger or Different Projects?
Moving into larger commercial projects can introduce new insurance requirements. Before tendering or signing a head contract, consider whether your existing insurance can meet the requirements of the project.
- Contract Works Insurance
- Public Liability limits
- Professional Indemnity Insurance
- Additional insured requirements
- Workers Compensation
- Project specific insurance conditions
3. Does Your Contract Works Insurance Still Match Your Projects?
If the size or type of projects you undertake has changed, your Contract Works Insurance should be reviewed accordingly.
- Current project values
- Maximum contract values
- Types of projects
- Project locations
- Existing structures
- Maintenance or defects liability periods
4. Is Your Public Liability Limit Still Appropriate?
As your construction business grows, consider whether your current Public Liability limit continues to meet your business and contractual requirements.
5. Have Your Design Responsibilities Changed?
Professional exposure can develop gradually as a construction business grows. Even if your business does not employ designers directly, activities such as Design and Construct work, consultant coordination, shop drawings, specifications or technical advice may create professional exposure.
6. Have You Purchased New Plant, Tools or Equipment?
Builders often add equipment throughout the year without thinking about their insurance schedule. Check whether new assets have been added to your policy and whether insured values remain appropriate.
- Mobile plant
- Generators and compressors
- Power tools
- Specialist equipment
- Trailers
- Equipment stored in vehicles
- Hired in plant
7. Have Your Employees or Subcontractor Arrangements Changed?
Changes to employee numbers, payroll, subcontractor use or interstate operations can affect your risk profile and should be considered as part of the insurance review.
8. Have Your Contracts Changed?
Larger or more complex contracts may contain specific insurance requirements relating to policy limits, additional insured parties, Professional Indemnity, Contract Works, insurance periods and subcontractor insurance.
9. Have You Reviewed Your Claims and Near Misses?
Claims and incidents can help identify where the business is exposed. Review claims made during the previous year, incidents that almost resulted in claims and any recurring risks across projects.
How Much Has Your Construction Business Changed?
Complete the free Builder’s Insurance Review Checklist to identify what may need discussing with your broker before your next renewal, tender or major project.
Complete the Builder’s Insurance Review Checklist
Your construction business can change significantly in 12 months. Before your next renewal, tender or major project, it is worth checking whether your insurance still reflects the business you operate today.
Frequently Asked Questions
How often should builders review their insurance?
Builders should generally review their insurance at each renewal and whenever there is a significant change to the business, such as larger projects, increased turnover, new equipment, interstate work or additional design responsibilities.
What insurance should a commercial builder consider?
Depending on the business and projects, a construction insurance program may include Contract Works Insurance, Public Liability Insurance, Professional Indemnity Insurance, Plant and Equipment Insurance, Workers Compensation and other business specific covers.
Should I review my insurance before tendering for a larger project?
Yes. Larger commercial projects may contain insurance requirements that differ from your existing arrangements. Reviewing the insurance schedule before signing can help identify required limits, policy conditions or additional cover.
When should I tell my broker that my business has changed?
Do not wait until renewal if the change is significant. New types of work, larger contracts, substantial equipment purchases, new locations or additional professional responsibilities are all examples of changes worth discussing with your broker.
When Was Your Builder’s Insurance Last Reviewed?
Your construction business can change significantly in 12 months. Your insurance should keep up with it.
At Be Covered Insurance Brokers, we work with commercial builders, civil contractors and trade businesses across Australia to review construction insurance against their current operations, projects, contracts and assets.
Speak with the Be Covered team to arrange a review of your construction insurance.
