Contract works insurance
Contract works (CW) insurance covers physical loss or damage to the works during construction: fire, theft, storm. Builder's primer on scope, holder, and exclusions.
Ask Chalkline about this →Contract works (CW) insurance is a project-specific property policy that covers accidental physical loss or damage to a building under construction. Standard insured perils include fire, storm, flood, theft, vandalism, and impact. The policy runs from site setup to practical completion, with an optional extension over the defects liability period.
Three names, one cover. CW insurance, contractors all risks (CAR), construction works insurance, and builders risk insurance are interchangeable terms for the same product. Different insurers use different labels.
What it is not. CW insurance is distinct from two other policies on a residential build:
- Public liability (PL) covers injury to third parties or damage to their property. CW covers damage to the build itself.
- Home warranty (NSW HBCF, VIC DBI, QLD QHWS) is a last-resort statutory scheme protecting the homeowner against an insolvent or non-completing builder. CW covers physical loss during the build, not builder failure.
A complete residential insurance stack carries all three.
Who holds the policy. On standard residential work, the builder takes it out and names the owner as an interested party. Building contracts (HIA, MBA, ABIC) place the obligation on the contractor for the full contract period. On principal-controlled projects (often larger commercial or multi-residential), the developer holds a programme policy naming all contractors and consultants.
Sum insured. Set the sum insured to the full contract value: materials, labour, preliminaries, plus a variations buffer. Underinsurance triggers proportional payout reductions on a claim. Renovation works should also extend the policy to existing structures on the site, otherwise the original house is uninsured during the build.
Common exclusion. Defective workmanship is excluded; CW pays out for damage to sound work caused by a defect, not for the cost of fixing the defect itself. Policy wording on this varies; the DE/LEG exclusion clauses are the part to read carefully.
Also known as: CW insurance, CAR, contractors all risks, construction works insurance, builders risk.
Category: Insurance / risk management.
Related
- Construction works insurance (deep article)
- Compliance calendar
- Insurance schedule tracker
- Reading a building contract
- Variations process
See also
Last updated: 2026-05-14. Verified: 2026-05-14.