You're building something. Make sure a gap in the paperwork isn't what finishes it off.

Contract works insurance is built from two parts. The first insures the physical works themselves, the structure going up, the materials on site waiting to be used, and often materials in transit to the site or stored nearby before delivery, against damage from fire, storm, flood, impact and theft. The second is a liability section that responds if the construction work injures someone or damages property that isn't part of the build, a crane strike on a neighbouring fence, a trench that undermines the footpath next door.

Which shape of policy you need depends on what you actually do. If you're a builder running multiple jobs through the year, an annual construction policy covers every project you start without arranging a new policy each time, usually up to a maximum individual project value and a maximum build period. If you're taking on one job, a house extension, a single commercial fit-out, a single strata block, a single project policy covers that job specifically and runs out when it's finished. If you're a subcontractor, you may be asked to hold your own single project policy naming the head contractor as an interested party, precisely because the head contractor's own policy might not extend to your work the way you'd assume.

Contract works insurance usually doesn't insure the tools, machinery and vehicles used to build the project, though a small number of wordings bundle limited plant cover into the same policy rather than excluding it outright. Either way, excavators, generators, scaffolding, site sheds and mobile plant are almost always better placed under their own dedicated policy, see Plant & Equipment Insurance, because they're assets that move between jobs rather than value tied to one build.

Most building contracts name someone as responsible for insurance, but that clause gets set once at signing and is rarely checked again by anyone actually doing the work. Two structures are common. Under contractor-arranged insurance, the builder or head contractor takes out the policy and is expected to make sure it extends to subcontractors. Under principal-arranged insurance, the developer or building owner arranges one policy that's meant to cover everyone on the project, contractor and subcontractors alike, so nobody underneath is relying on someone else's policy actually naming them. Standard Australian building contracts (AS4000 and AS4300 among them) make you choose one or the other in the contract annexure. If you're a subcontractor, that single tick box in a document you may never have read decides whether you're protected by someone else's policy or need your own.

The second risk is the money moving under the policy while the project is running. A contract signed for $2 million can easily cost more than that to finish, because construction and building costs have risen sharply. Non-residential building construction costs across Australia rose 4.4% in the year to June 2026, and about 40% since 2018 (ABS Producer Price Indexes, construction, released 31/07/2026), and that trend doesn't pause just because your project is already underway. If your sum insured is set at day one and never revisited, it can fall behind the real cost to complete well before practical completion.

On the contract works policies we place, the sub-limits generally run between 5 and 10 per cent of the project value, and each insurer is different. The variations and escalation buffer, the one sized for a job that grows, is the exception worth knowing about: on some of the wordings we place it defaults to 20 per cent, double the top of that range. Those percentages are set against the project value the insurer was given at the start, so a job that has grown past that number carries sub-limits sized for the old one, and a higher sub-limit has to be asked for rather than volunteered. On a market where construction costs have risen about 40% since 2018, that gap can open well before the last invoice is paid. Every variation you sign is a reason to check the number.

This matters differently depending on the size of the loss. On a partial loss, an underinsured contract works sum can trigger the same average or co-insurance clause that catches underinsured buildings: most policies test your sum insured against at least 80% of the true value of the works, and if you fall short, the payout can be scaled down in proportion. See The Co-Insurance Clause: What Every Building Owner Must Know for exactly how the maths works. On a total loss, the policy pays out the full sum insured, but if that figure no longer matches what it actually costs to rebuild the works from where they stood, you fund the difference yourself, on top of losing the project's progress to that point.

Buy contract works cover online or over the phone from a call centre and you'll be asked for a project value and a start date. That's the whole conversation. What actually protects you isn't a document review nobody promised, it's being asked the right questions before you're quoted at all.

We use the same method on every product we place, construction included: we ask why you've called today, then keep asking open, "risk driver" discovery questions until we land on what's actually worrying you, not just what you think you're supposed to ask for. That's what separates a broker from an order taker. It's also where we ask the question that matters most from the risk section above: does your sum insured still match what the job will actually cost to finish, not what it cost to start.

We place contract works across a handful of specialist markets rather than one insurer's product, which matters because most of the builders, small construction companies and owner-builders who come to us are running contract values under $5 million a year, not a $50 million tower. Cover gets shaped to a project that size, not stretched from a program built for something much bigger, or squeezed into whichever policy shape happens to be easiest to sell.

Builders and small construction companies are who most of our construction enquiries actually come from, generally running contract values under $5 million a year rather than managing a large-scale developer program. If that's you and you're running multiple projects through the year, an annual construction policy is usually the better fit, so a new job doesn't mean a new policy application every time, within the maximum project value and build period the policy sets.

Owner-builders in Queensland are a category worth its own line, because they're a group that commonly has no cover at all and doesn't know it. If you take out an owner-builder permit for work valued over $11,000, you're not eligible for QBCC's Home Warranty Insurance scheme, which exists to protect homeowners against a licensed builder failing to finish or fix a job, not the other way around. That leaves you carrying the risk of a fire, storm or theft on your own project yourself unless you arrange your own contract works policy, and because there's no lender or head contract forcing the point the way there is for licensed builders, it's the step owner-builders skip most often.

Subcontractors are often required by the head contract to hold their own single project policy naming the main contractor as an interested party, specifically because the head contractor's policy may not extend to cover the subcontractor's own work the way either party assumes. If you're the builder engaging them, there's a second thread to pull: what you pay subcontractors is how your liability insurer rates the risk of one of them being hurt on your site, and on many wordings that declaration is what switches the cover on, which is set out in If a subcontractor is hurt on your job, can you be held liable?.

Commercial building owners extending, fitting out or renovating a premises they already own need contract works cover for the works themselves, separate from the building insurance that covers the existing structure around it.

Developers and principals commissioning a build, rather than doing it themselves, sometimes take control of the insurance directly through a principal-arranged policy, so cover doesn't depend on every contractor and subcontractor on site having their own adequate policy in force for the life of the project.

Assuming you're covered because "there's a policy" somewhere on the project. Covered in the risk section above, and worth repeating here because it's the single most expensive mistake: a policy existing on your project and a policy protecting you are not the same fact.

Confusing QBCC Home Warranty Insurance with contract works insurance. These are two completely different products doing two completely different jobs. Home Warranty Insurance protects a homeowner if their licensed builder can't finish the job or fails to fix a defect, it's about the builder failing you. Contract works insurance protects the physical build from damage, fire, storm, theft, while it's underway, regardless of who's at fault. Having one does not mean you have the other, and QBCC's scheme doesn't apply to owner-builders at all.

Letting the sum insured go stale. A figure that matched the contract price on day one can be well short of what it actually costs to finish by month nine, for the reasons in the risk section above.

Running past the construction period the policy allows for. Annual and single project policies both set a maximum build time. If your project overruns, whether from weather, approvals or a supply chain delay, the policy doesn't automatically stretch with it. Tell your broker as soon as a delay looks likely, not once it's already happened.

Assuming the policy pays for fixing your own faulty work. It generally doesn't, and this is one of the most misunderstood exclusions in the product. If damage happens because of faulty design, materials or workmanship, the policy typically won't pay to fix that faulty work itself. Where it gets more useful is the damage that faulty work then causes to the rest of the project, a botched weld that later causes a fire, for instance, which many policies will still cover for the undamaged parts of the build. The line between "the faulty work itself" and "damage the faulty work caused" is exactly the kind of fine print worth having a broker read before you need it, not after.

Assuming cover stops the moment the building is finished. Most policies carry a defects liability period after practical completion, during which damage that shows up as a result of something that happened during construction can still be claimed. Check what your specific policy actually extends to cover in that window, because "extended maintenance" and "guaranteed maintenance" wordings cover genuinely different things, and don't let your contract works and liability cover lapse the day the builders pack up if you're still inside that period.

Forgetting materials that haven't reached the site yet. Timber, steel and fittings sitting in a supplier's yard or on a truck are often at real risk of theft or damage before they're ever unloaded. Check whether your policy extends to materials in transit and in storage, not just what's physically on site.