Contract works insurance for work in progress

Its purpose is to help repair or rebuild damaged insured work, often called reinstatement. It does not guarantee successful completion or pay every financial consequence of delay.

Builders and trades businesses undertaking new construction, alterations or fit-out may consider it. Acceptance depends on the actual business, project and selected terms; these examples are not an eligibility list.

The work itself, liability for harm to others and your tools are separate insurance questions. The builder insurance page and tradesperson insurance page explain wider package choices.

If you are commissioning work on your own home or undertaking a self-build, establish who is responsible for arranging insurance and what arrangement is needed. Do not assume an arrangement intended for contractors fits your circumstances.

Identify the property involved before comparing the proposed protection. Contract works insurance is not automatic cover for everything at a site.

Property/category	What to establish
Permanent works	Work included, value and whose financial interest or responsibility is protected (the insured interest).
Temporary works, such as structures used to support construction	Whether the policy definition and selected items include them.
Materials to become part of the work	How they are identified with the project, responsibility and value.
Client-supplied materials, sometimes called free-issued materials	Whose responsibility or financial interest is protected and how values are recorded.
Locations: off-site storage and transit	Additional cover, locations, limits and security.
Tools and own or hired machinery (plant)	Separate definitions and selected sections; not automatically part of the works.

The examples below are fictional and do not determine liability or cover.

Fire, storm, flood, theft, vandalism and accidental damage are events to check against the wording. Their inclusion and restrictions depend on the arrangement, location and protections agreed. Describe specialist methods and activities accurately rather than assuming the project label is enough.

Example: materials stored away from the site

Materials allocated to a refurbishment are stored elsewhere before delivery. Ask who is responsible for them, how the materials are identified as belonging to the project, and whether the proposed storage and transit provisions fit. Check values, limits and security. Their intended use in the project does not by itself confirm cover while stored away.

Agree insurance responsibilities early, before work starts, and confirm them against the policy terms. Resolve them in time to inform the contract before it is signed. In construction contracts, “employer” or “principal” can mean the commissioning party rather than an employer of staff.

Ask:

• Who arranges cover?
• Whose financial interests or responsibilities are protected?
• Which works and property are included?
• What basis and limits are required?
• What period must be insured?

Joint names, noting an interest and listing a project on a certificate are not equivalent. Ask the provider and appropriate adviser to explain the proposed arrangement and its effect on each party.

If using a Joint Contracts Tribunal (JCT) construction contract, check the actual form, edition and insurance clauses. A general “JCT compliant” label, quote or certificate is not a complete compliance assessment, even if a client accepts it. Clearcut does not review contracts or choose insured-party arrangements; obtain appropriate insurance/legal clarification where needed.

Check existing structures and contents separately from the new works. The contractor, commissioning client, owner or another party may have insurance responsibilities to resolve under the contract and actual policies.

Example: an extension beside an occupied home

A fire damages an unfinished extension and part of the original house. Separate the new work, original structure and contents. Establish who insures each, which arrangements have been accepted and whether the building work affects existing protection.

Do not assume ordinary home or property insurance continues unchanged during construction. Equally, do not assume existing structures can never be included in an agreed arrangement. Clarify the actual provisions and any owner, landlord or lease responsibilities.

A contract requirement does not create insurance. Using one insurer for new works and existing property does not automatically resolve gaps or differences between sections.

Work starting

Policy start and end dates are not the only dates to examine. Ask how the project is accepted and when work protection starts. Discuss already-started work before relying on a proposed arrangement; a quote does not establish retrospective acceptance.

Completion, handover and use

Check completion, certification, handover and taking into use separately. Final payment is not automatically the end-of-cover test. An annual policy still being in force does not prove a completed or occupied area remains insured as work in progress.

Returning to put defects right may be a contractual duty. It does not alone establish continuing insurance for all property. If maintenance cover is selected, check its scope and period.

Pauses, delays and partial handover

Check the actual provisions for stopped work, occupation and partial handover, including required reporting or agreement. There is no single pause threshold or procedure for every policy.

Example: one area is taken into use before the rest. A client starts using a completed area while construction continues elsewhere. Tell the provider the use date, completed area, certificates or handover agreed, and remaining work. Ask how each area is insured and who is responsible.

Describe changed facts and dates promptly through the provider’s process. Do not assume a request or acknowledgement confirms agreement. Ask an authorised provider to confirm accepted terms, conditions, effective date and required updated documents.

For actual damage, follow claims instructions rather than waiting for a revised quote.

Ask which valuation basis the provider requires. Turnover, contract price, works value and the repairing or rebuilding the work are different measures; one should not be substituted for another without clarification.

Prepare these questions:

• How should the project and maximum contract values be recorded, including materials supplied by others?
• How are variations, increases in value and changes in duration handled?
• Are professional fees and debris-removal costs included, and do these costs count towards the limit or get paid in addition to it?
• What VAT treatment is required for the declaration and any settlement?
• Does an underinsurance or declaration-adjustment clause apply? If the wording uses “average”, ask the provider to explain that insurance clause. What would an inadequate value mean for a partial loss, even where the claim is below the limit?
• Does each limit apply per contract, location, event or another basis, and what excess or aggregate applies?

Ask whether available cover is restored after a loss and on what terms; do not assume an automatic reset. A headline limit is neither a promised payout nor proof that the contract’s insurance requirements are satisfied. Use the provider’s requested calculations and obtain clarification where the basis is unclear.

An annual arrangement may cover qualifying projects during the policy period. A single-project arrangement covers the specified project on agreed terms. These market descriptions do not establish which options are available to every applicant through a particular provider.

Arrangement	What to identify	What to check
Annual	Accepted activities, maximum contract value and duration, declarations and treatment of ongoing projects.	Which new jobs qualify and whether overlapping projects share limits or have special conditions.
Single project	Agreed scope, dates, insured interests and extensions.	Whether existing structures/maintenance are included and which events end cover.

Compare the actual proposed arrangement. Neither annual cover nor a project-specific policy is inherently the cheaper or suitable choice for every business.

These descriptions address different subjects or combinations of cover.

Subject	Key question
Contract works	Which physical works, materials and project stages are insured?
Public liability	Which third-party liabilities are covered under the actual terms?
Tools and plant	Which equipment interests and selected sections apply?
Contractors all risks	Which sections does the named arrangement contain, with what exclusions?

“All risks” does not mean every risk or loss. It may describe a wider arrangement rather than an identical substitute for every contract works policy. Tools, own or hired plant and liability are not automatically included.

For hired machinery, check damage cover, hire-agreement responsibilities and continuing hire charges separately.

Faulty work, resulting physical damage and delay penalties are different cost questions. Check each under the actual terms; there is no universal faulty-workmanship outcome.

For machinery you hire, read the hired-in plant insurance guide to check hire responsibilities, equipment values and continuing charges.

Prepare details about:

• the project, values and dates;
• site, methods, materials and storage;
• existing property and parties insured;
• selected terms, excess and requested history.

These can affect terms and price; they are not a universal rating formula or confirmation of acceptance.

The tradesperson insurance cost guide provides wider package-pricing context. A trades package premium should not be treated as a standalone contract works benchmark.

Compare the actual total payable and payment terms.

Copy this project checklist and fill in the contract and proposed policy answers. Add references and unresolved questions; it is a preparation aid, not a Clearcut submission.

Project detail	Contract responsibility	Policy terms	Question to resolve
Business, site and activities
New works and alterations
Existing building and contents
Materials, including those supplied by others
Values and duration
Start, completion, use and pauses
Subcontracted work
Tools and machinery
Contract form, edition and parties

Use the subcontractor arrangements guide for workforce questions and the multiple-trades guide to help describe your actual activities.

When arranging business insurance, fair presentation can require more than answering application questions. Disclose material information your business knows or ought to know. Ask the insurer or broker if you are unsure what to provide.

You could ask the provider:

Which works and materials are insured? What has been agreed for the existing building and contents? Who is insured? Which start, completion and use dates matter? What values, declarations and restrictions apply? What confirmation is required?

Read the applicable wording/version, schedule and endorsements together. If a summary is silent, record “not stated; ask” rather than assuming inclusion or exclusion. Ask the provider which terms apply if documents conflict.

A request, acknowledgement or quote does not confirm active cover. Use the relevant provider process for an existing policy, already-started work or known damage. Ask the responsible insurer or broker for clarification; do not send contracts or confidential project documents to Clearcut.