Construction Risk


The following covers should be considered for domestic building sites in New South Wales.

Public Liability

Covers the Owner/Builders legal liability following injury to others and damage to their property. The suggested Limit of Indemnity, $5,000,000, includes cover for Damage to neighbours, Underground Services, Fixed Property and Negligent Damage Caused by Unregistered Vehicles. Contract wordings may create exposures for goods in your "care, custody & control". Any construction exceeding 10 metres in height or of non-standard construction methods, must be specifically negotiated with Insurers.

Licensed Contractors must have their own Liability & Workers Compensation covers.

Construction Risks

Proposed new constructions should be insured during the period of construction for risks such as burglary, malicious damage, fire, storm, tempest, impact by vehicles and other perils as listed. Additional sections can be covered to include hand tools/equipment used on the site. Please advise if tools and materials lost in transit cover is required.

Premium is based on:

  • The Contract Value for the new works
  • Existing building replacement cost if work is an extension
  • Professional fees (Architects/engineers/Surveyors etc)
  • Removal of debris and other site clearance costs
  • Plant & Tools at site
  • Goods in Transit


Unregistered Vehicles in New South Wales

May require Temporary Registration Permits (CTP at the RTA) and full CTP cover if you use unregistered machinery (such as Backhoes/Bobcats) which may cross roads, driveways or enter "public thoroughfares" such as car parks open to the public.

Workers Compensation Indemnity

Cover and Premium is calculated on wage roll excluding Directors Fees, Site work allowances, various other payments for Employees & Contractors Invoices.

A minimum premium Workers Compensation provides peace of mind for claims that may be brought against you by any injured person working at your site, even though you did not directly employ them. You may be considered "Part Principal" if you supply materials or tools for example.

A New South Wales Workers Compensation Minimum Premium Policy costs $120.00.

Home Owners Warranty

NSW Builders are required to provide Home Owner Warranty cover. There have been important changes to this Act. The NSW Department of Fair Trade has information. Please phone 1800678588 for details of these changes.

Should you wish to sell the property before "Warranty" runs out, this may be required by the people purchasing from you. If you do not intend to stay in this home for some years we suggest Home Owner Warranty cover be purchased.

As a private Homeowner, you could collect the separate Tradesmen’s Home Owner Warranty Contracts to provide yourself with protection if the Tradesman suffers "Insolvency" or if there is need to carry out repairs to your building during the Warranty Period.

Your Head Contractor/Builder may be able to add your building to his "Home Owner Warranty" blanket Annual policy (if he has one). The indemnity provides insolvency indemnity & seven years building defects cover. The cover is subject to $500 excess that would need to be paid by the Homeowner. The Tradesman or Builder may be liable for up to $300,000 (the indemnity they Guaranteed to the Insurer under the Home Owner Warranty).

Other Issues

If you intend borrowing money from a Bank to finish this building, they will require that you have Construction Risk cover. Please remember that you will only be able to arrange this cover before you commence any work at your site. It is possible to optimize loans & mortgages. Should you need any advice please call.

Contract Wordings

It is in your interest to ensure that contractors provide proof of Liability & Workers Compensation insurance and an appropriate Work Contract. If any contractor undertakes work for you in NSW valued over $12,000, please check what they should supply to satisfy the NSW Home Owner Warranty Insurance requirements.

Blank Invoice Contracts are sold by the Department of Fair Trade if your Contractors need them or ask them to call us for a report.