Why is Construction & Public Liability Insurance Required?
One of the most commonly overlooked problems for people building, renovating or extending their home is insurance.
By Owner builders taking out the permit, they can be deemed in control of site safety and worker co-ordination. Uninvited guests, neighbors or workers could sue for hundreds of thousands of dollars if an injury or damage is traced to their negligence. It is vital that they take out Public Liability Insurance to protect themselves and their assets against potentially huge claims.
Public Liability covers third party personal injury and property damage that occurs during the period of the policy.
Where workers are employed rather than subcontracted, the owner builder should seek workers compensation cover. Public Liability does not satisfy workers compensation requirements.
Note: Owner Builders are required to ensure that all sub-contractors and specialist suppliers provide their own Public Liability. Ask for a copy of their current insurance certificate.
What does Construction Insurance include?
Construction Insurance (also known as Contract Works, Material Damage or Construction Risk insurance) covers the main risks encountered during the building process. These include malicious damage or vandalism, theft, fire damage, storm, wind and water damage. Ensure the policy includes, at no extra charge, an amount to cover demolition, removal of debris and professional fees, should the unforeseen occur.
What about extensions & renovations to my home already covered by Home & Contents Insurance?
It is vital that the Owner Builder checks the specific policy wording of their Home & Contents Policy, as most insurers suspend Home Insurance and Public Liability cover during renovation and extension work over a certain value or complexity. This could affect the cover to the existing house for loss or damage as a direct result of the renovations or extensions. Public Liability cover could also be affected. Common situations during works where this may occur include:
– Vacating the building
– Removing external walls or roofing
– Altering the internal load bearing structures
– Exceeding the normal project value which can be as low as $20 000.
When renovating or extending ensure your client checks their current policy wording carefully. Australian Owner Building Insurance Services offers the option of being able to cover both the existing home and the extensions or renovations under its Construction Risk policy.