What is Contract Works Insurance and Do I Need It?
29th July 2011
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Ok here we go! This is fairly technical so I have tried to simplify it but if you still require help, please feel free to contact me.

Contractors all risks (also known as Contract Works insurance or 'CWI' to differentiate it from another type of insurace 'Construction All Risks', which is usually for larger projects) is insurance specially designed for builders and a number of other trades working at a contract site. 

It doesn't just cover liability it covers property (tools and plant) as well. It can be bought 'stand alone' or as addition to a liability policy.

CWI CAN (but doesn't necessarily) include cover for public and employers liability (compulsory if you have employees either on a PAYE basis or CIS4 Card), contract works, own plant, hired-in plant and employee's tools. So a full CWI policy pretty much all the insurance a contractor needs rolled into one. However there's no real legal definition, so each policy can be different, not all include Employers or Public Liability for instance (for some it may be an optional extra), so it's important to check exactly what you are buying.

The main part of CWI is the contract works section which provides cover for the property being worked on (e.g. new house, etc.). However, cover for a pre-existing property (e.g. existing house when building an extension) is excluded (except for actions by the contractor) and must continue to be insured under its own insurance cover. In other words if the builder starts a fire whilst building the extension, the rest of the house is covered under the contractors insurance, but if the house burns down because of a chip pan fire caused by the owners.... it isn't. Which is fair enough when you think about it.

The reasons for buying it are mainly that damage to the contract works can mean having to do the work twice for only one payment (e.g. the extension catches fire or the roof blows off half way through the job) and any plant that gets nicked will have to be replaced from the contractors own resources even if the plant is hired.

Most CWI policies have quite stringent conditions attached such as the provision of fire extinguishers whilst undertaking certain types of work. It's really important that any contractor thouroughly read the policy and adhere to these conditions or the policy is worthless. 

Premiums mainly depend on the value and type of work, number of employees and previous claims record.

Oh and most don't cover you to do work on nuclear reactors, which I'm sure is a matter for concern !

For more information on this and other insurance matters, click here.


About the Author

Andy P

Member since: 22nd June 2011

Having worked for over 10 years in the Hospitality and Catering Trade, I am able to bring a fresh outlook on how customer service can effect how our, family run, Insurance Brokers operates.

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