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What Construction and Trades Insurance Covers
Construction and trades insurance covers the work in progress, the tools and plant, the liability on site and the professional advice of businesses that build, install and maintain: residential and commercial builders, civil contractors, electricians, plumbers, HVAC trades, painters, roofers, and the engineers and project managers who design and run the job.
The risks live on site. A worker or a passer-by is injured. The crew damages the client's home, the neighbour's fence or a service in the ground. Fire, storm or theft takes the works in progress, the materials stacked for next week and the tools in the ute. A defect or an installation error means rework, and a consultant's design error can hold up the whole project.
Principals and head contractors ask for a certificate of currency for public liability insurance before anyone starts, and building contracts set out who arranges contract works cover for the project. Registered builders carry statutory warranty obligations on domestic work, and a consultant's contract usually requires professional indemnity. The insurance has to match what the contract says, not what the trade assumes.
Fortis Risk Solutions arranges construction and trades insurance for contractors across Australia from offices in Box Hill and Hawthorn, as part of our business insurance range. We read the contract, the subcontractor arrangements and the plant list before approaching insurers. Project cover starts with contract works insurance, and liability with public liability written for the trade.
Who this covers
The cover a contractor needs follows the work. The notes below show what matters for each trade.
Residential construction
New homes, extensions and renovations under a domestic building contract. Contract works for the project, public liability for the site, tools and plant, and the statutory warranty obligations that come with registration. Existing structures being worked on need their own extension.
Commercial construction
Larger contracts, principals who set insurance requirements and subcontractors on every trade. The contract decides who arranges the project policy, and the head contractor collects certificates of currency from every trade. Professional indemnity enters where the builder also designs.
Civil engineering
Roads, drainage, earthworks and services in the ground. Damage to underground utilities, third party property and the works themselves are the recurring claims, and plant and machinery is a large part of the sum insured. Contracts often require high liability limits.
Builders and contractors
The general builder carries all of it at once: contract works, public liability, tools, plant, commercial motor and management liability for the business. Subcontractor conditions in the liability wording are the first thing we check. See the contract works insurance page.
Electricians and plumbers
Work inside other people’s property, with fire and water the obvious losses. Public liability with a faulty workmanship extension for the resulting damage, tools in the van, commercial motor with business use, and personal accident for a sole trader who cannot work after an injury.
HVAC services
Installation and maintenance of plant that can fail expensively. Public liability for damage during installation, products liability for what is installed, and professional indemnity where the business designs the system rather than only fitting it.
Painting and renovation
Overspray, spills, ladders and other people’s furniture. Public liability for damage to the client’s property, tools and equipment, and the existing structure question on any renovation where the policy might treat the house as being in your control.
Roofing and structural works
Working at height, hot work and weather exposure. Insurers rate height limits, hot work conditions and asbestos exclusions, and liability wordings need to be checked for each. Contract works covers the roof under construction and the materials on site.
Engineering consultants and project managers
Advice and supervision rather than physical work. Professional indemnity for design, certification and project management errors, which can be claimed years later, plus public liability for site visits and run-off cover when the practice closes.
Construction and Trades Insurance: Cover Sections and Benefits
Construction and Trades Insurance FAQs
Public liability is the base, because clients, builders and councils ask for it and because damage to other people's property is the usual claim. Tools cover protects what is in the ute, personal accident replaces income for a sole trader who cannot work, and commercial motor insurance covers the vehicle. Trades that give design advice add professional indemnity, and anyone employing staff holds workers compensation.
In most building contracts the builder, and the policy covers the works, the materials and the temporary works for the contract period. On larger projects the principal sometimes arranges a project policy that all contractors sit under. The contract says which it is, and a subcontractor should confirm the cover is in place rather than assume it, because a gap only shows after the storm. Delay costs on a damaged project are a separate question, closer to business interruption insurance than to contract works.
Not always. Many wordings exclude property in your physical or legal control, which can include the part of the house you are working on. A contract works policy covers the works themselves, and some liability wordings add a limited extension for the existing structure. We check how the two fit together for each trade, because this is the most common gap on a renovation.
Yes, in almost every case. A head contractor's public liability does not cover a subcontractor for the subcontractor's own negligence, and insurers often require a head contractor to collect certificates of currency from every trade on site. Labour hire workers and subcontractors who are effectively employees raise workers compensation questions as well, which the state scheme decides, not the contract.
Professional indemnity for errors in design, specification, certification or project advice, which can be claimed years after the job finishes. Public liability for site visits. Cyber cover for the drawings, the client data and the payment instructions that attract fraud. Consultants should also hold run-off cover when they retire or sell, because a claim can arrive after the business has closed.
Construction wordings turn on definitions: works, existing structures, hot work, height limits, asbestos and subcontractor conditions. FRS helps you disclose the trade and the contracts accurately, structure limits to match what principals demand, compare specialist construction insurers and act as your advocate at claim time. We also check the insurance clauses in a contract before you sign it, and build the business insurance package around the yard and the office.
Related pages
Dedicated pages in this group: Architect and Design Insurance
Related industry groups: Property and Real Estate Insurance, Professional Services Insurance, Transport and Automotive Insurance
Talk to a broker about Construction and Trades Insurance
Call 03 7046 3766 on weekdays between 9:30am and 6pm, email admin@fortisrisksolutions.com.au, or send an enquiry and a broker from our Box Hill or Hawthorn office will come back to you about construction and trades insurance. Tell us what the business does and what the lease or contract asks for, and we take it from there.