.jpg)
.jpg)
When you’re undertaking construction, renovation, or refurbishment work, ensuring you have the right insurance in place is crucial. One policy that’s often overlooked but is vital in these scenarios is Contract Works Insurance. Designed to protect projects from start to finish, contract works cover provides financial protection against unforeseen events that could jeopardise a project or lead to costly setbacks. Whether you’re expanding a care facility, renovating existing structures, or building from scratch, here’s why contract works insurance is essential.
Also known as Contractors’ All Risks Insurance, provides cover for construction projects, including the materials, work in progress, and equipment used on-site. This policy protects against risks such as fire, theft, vandalism, weather damage, and accidental incidents that could cause damage to the project. Essentially, it provides a safety net so that, if something goes wrong, you won’t bear the full financial brunt of repairing or replacing what’s lost or damaged.
It’s important to note that while this insurance is commonly taken out by contractors, property owners commissioning the work, such as care home operators, who may also benefit from securing a policy for added protection and peace of mind.
1. Covers Work in Progress
One of the primary features of contract works insurance is that it covers work already completed but not yet handed over. If a fire or severe storm damages the building while construction is underway, the policy ensures that your project doesn’t come to a financial halt. Instead, the insurance will cover repair or rebuilding costs, keeping your project on track.
2. Protection for On-Site Materials and Equipment
Construction projects require significant amounts of building materials and equipment, often stored on-site. These items are vulnerable to theft and damage and replacing them can be expensive. This insurance extends coverage to materials and equipment used for the project, safeguarding them in case of unexpected events.
3. Third-Party Liability
Construction projects are inherently high-risk, and there’s always a chance of accidental damage to nearby property or injuries to third parties. Contract works insurance often includes public liability coverage, which protects against legal costs and compensation claims if a third party is injured or if property is damaged due to the construction activities.
4. Flexibility in Coverage
Contract works insurance can be tailored to suit specific projects. Whether it’s a large-scale renovation or a small refurbishment, policies can be adjusted to the scope and complexity of the project, ensuring comprehensive protection without overpaying for unnecessary cover.
5. Continuity Across Multiple Projects
For care home operators managing multiple properties, contract works insurance can offer cover on an annual basis for all ongoing projects, allowing for continuity and peace of mind as you move between locations. This eliminates the need to arrange a new policy for each project and provides a streamlined approach to managing risk across your operations.
1. Ensures Financial Protection in a High-Risk Environment
Construction sites, especially in operational care homes, can be high-risk environments with heavy machinery, electrical wiring, and other hazards. Even with the best safety practices, incidents can happen. Contract works insurance ensures that if damage or delays occur, the financial impact is minimal, allowing your project to proceed without unexpected costs.
2. Protects Against Project Delays
In the care sector, project delays can disrupt operations, delay expansions, and increase operational costs. By covering repair and replacement costs, contract works insurance helps avoid prolonged delays, ensuring your project remains on schedule, which is particularly important when working within strict timelines.
3. Compliance with Lender Requirements
Many lenders require contract works insurance for financed construction projects to protect their investment. If you’re financing a care home expansion or refurbishment through a loan, having contract works insurance in place may be a requirement for loan approval and project funding.
4. Peace of Mind for Stakeholders and Residents
Undertaking construction or refurbishment in a care home setting means prioritising safety and minimising disruption for residents. Contract works insurance provides peace of mind for management, staff, and stakeholders, knowing that financial protection is in place in case of an incident. This can also reassure residents and their families that the project is being managed with comprehensive risk safeguards.
When selecting contract works insurance, here are a few factors to keep in mind:
Project Scope and Duration: Ensure that your policy covers the entire project, from start to finish, with consideration for any potential extensions in timeline.
Coverage Limits: Review the coverage limits to confirm they’re sufficient for the scale of your project. Underestimating the value of materials and equipment can result in underinsurance.
Third-Party Involvement: If your contractor already has contract works insurance, verify the scope of their policy to understand any potential gaps. In some cases, it may be beneficial to take out your own policy for added protection.
Include All Sites as Needed: For organisations managing multiple projects, consider annual policies that encompass all sites to ensure consistent coverage.
Contract works insurance is designed to work alongside other commercial policies, such as property insurance, care home insurance and liability coverage. While property insurance covers existing buildings and assets, it usually excludes construction sites and work in progress. Contract works insurance bridges this gap by specifically covering the construction elements, ensuring comprehensive protection across all phases of a project.
At Quality Care Group, we understand the complexities involved in financing and insuring care home projects. Contract works insurance offers crucial protection for your investment, allowing you to manage risks effectively and maintain confidence throughout the project. By planning ahead with the right insurance strategy, you can avoid costly setbacks, protect your assets, and keep your projects on track to meet deadlines and budget.
If you’re considering a new build, renovation, or expansion for your care home, our team is here to help. Contact Quality Care Group to discuss how contract works insurance can support your next project with tailored advice and solutions, by calling myself, or a member of the team on 01273 424904.
.png){kind=small}
