A good civil contracting business can be very rewarding — and with reward comes risk.
Dealing with different aspects of the business such as contractors, property, construction material, equipment, labour, and multiple professional relationships is complicated, and each aspect comes with its own set of risks. Luckily, some of these risks can be managed with Civil Contractors Insurance cover.
What are some of the common risks civil contractors face?
- Machine and equipment damage or theft,
- Public liability,
- Construction liability,
- Environmental liability,
- Business Interruptions,
- Worker’s injury or illness,
- Professional breach or fraud,
- Debtors unable to make payments or becoming insolvent.
Type of insurance covers for civil contractors
Below is a comprehensive list of some types of insurance covers a self-employed contractor or civil contractors can purchase. It is important to note that some of the below policies may already be included within another policy or can be an extension of another policy. Your insurance broker can help explain the extensions in further detail, so please don’t hesitate to get in touch with any questions you may have.
Material Damage Insurance
This indemnifies your business if your machinery and equipment suffer from physical damage. It can cover risks associated with offsite storage and inland transit. Typically, this covers plant machinery items such as mobile plant, cranes and screening plants. You can also obtain cover for attachments, substitute hire and finance gap cover. Some insurers specialise in covering excavators, bulldozers, cranes, drills, loaders and offer other mobile machinery insurance typically known as an Industrial Special Plant policy.
Insurers also offer certain automatic and optional extensions (additional benefits) within this policy.
Some of the automatic extensions are:
- Expediting expenses covers express delivery costs, travel costs and labour cost for effecting temporary repairs or expediting repairs or replacement.
- There are certain ad hoc extensions that cover items such as accessories, locks and keys, personal effects, tyre replacement, windscreen replacement and restoring advertising signs.
- Finance gap protection covers a certain percentage difference in the drop in market value of a physical property that is lost or damaged against the amount owed for the property through hire purchase, leasing or other financial agreement.
- Protection against costs incurred for ongoing as well as substitute hire and also fire brigade as well as emergency services costs.
- Physical damage done to dry hire materials and lifted goods along with physical damage done to other materials caused due to dual crane operation.
- Loss of revenue.
- Owner’s protection.
Some of the optional extensions are:
- Increased Cost of Working.
- Agreed Value.
- Extended Dry Hire (Damage Waiver Cover) — find out if you need this cover.
- Hired-in items.
- Plant and Equipment on Watercraft.
Road Risk Liability
If you have a fully registered or conditionally registered vehicle or moving machine (such as forklifts and bobcats) that can be driven on publically accessible areas, road risk liability covers damage caused by your vehicle to another one on publically accessible areas (like third party car insurance product). Insurers also tend to offer additional protection such as replacement vehicle costs, sea transportation costs, removal of debris and towing.
Most insurers will not provide protection for the use of machinery as a trade tool, such as an operational crane or an excavator on site, as this will fall under the Public Liability insurance section.
Some of the automatic extensions for road risk liability are:
- Asbestos clean-up and removal of debris related to asbestos clean-up.
- Substitute business vehicles while your plant or machinery is being repaired or serviced.
- Damaged caused by you when moving other parked machines for the passage of your insured property.
- Removal of other kinds of debris.
- Covering costs of general average and salvage charges incurred while your insured property is in transit on sea transportation.
- Covering costs of damage to trailers and also for towing disabled vehicles.
- Cover against personal injury or property damage that arises due to the use of hired-in items.
Broadform Liability Insurance (Public & Products Liability)
Broadform liability usually refers to a policy that covers public and product liability within one policy. Public liability insurance protects your business against claims from third party property damage or advertising liability or personal injury suffered by a third party caused by your business’s actions or activities. Product liability protects your business against any damage or injury caused due to the product you provided to your client.
You can purchase public and product liability insurances directly as well, however, they are likely to have a lot of exclusions and may not be through a provider that specialises in your industry.
Some of the automatic extensions for broadform liability insurance are:
- Property in your physical or legal control (including hook liability) – This benefit pays for legally liable compensation for damage that your property caused to another property not belonging to you.
- Vibration and removal of support – This benefit provides protection against legal. compensation arising due vibration or removal or weakening or interference with support to land, buildings and any other property caused by you.
- There are extensions related to rail and airside activities that apply to the broader policy, however, these do not come standard (unless on our Plant Protect wording) and often need to be negotiated in – www.plantprotect.com.au.
Some of the optional extensions for broadform liability insurance are:
- Option to increase the sub-limits for the above automatic extensions (except rail or airside activities).
- Assumed liability insurance is a type of extension where the insurer will extend cover under Broadform Liability insurance to liability assumed under those contracts which are negotiated to be included as incidental contracts.
There are certain automatic extensions that apply to all three covers – Material Damage, Road Risk Liability and Broadform Liability:
- Automatic inclusion and deletion – If you acquire more of an existing insured property or dispose of an existing insured property, it will be accepted automatically and your insurance premium will be adjusted accordingly (limited 30 days $500k value).
- LPG conversion – If certain insured machinery or vehicle is modified to operate on liquefied gas, it will still be covered within the policy as long as all relevant statutory and regulatory standards are adhered to.
- Other interested parties – Insurers may consider financiers of the insured damaged property as an interested party in the claim.
- Hold Harmless (Subrogation Waiver) – In simple terms, this extension prevents your insurer from seeking an entitlement of damages caused by a third party to your insured property.
There is one optional extension that applies to all three covers — Material Damage, Road Risk Liability and Broadform Liability:
- Underground risks – Physical damage to or legal liability (direct or indirect) arising from your insured property whilst it is underground is covered under this extension. However, most insurers will not cover the cost to recover the underground property.
For professional contractors, it is very important to assess the risks involved in your projects and find the right cover to suit not only your business insurance needs, but your financial situation or needs too. At Hunter Broking, our expert insurance brokers can help you understand your requirements and provide a comprehensive, tailored solution to meet your specific needs. Request a quote today or visit our specialty contractors plant website on www.plantprotect.com.au.