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

The first part insures the 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. The second part 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, or a trench that undermines the footpath next door.

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, like a house extension, a single commercial fit-out, or a single strata block, a single project policy covers that job and runs out when it's finished.

Contract works insurance usually doesn't insure the tools, machinery, and vehicles used to build the project. Excavators, generators, scaffolding, site sheds, and mobile plant are almost always better placed under their own policy, because they're assets that move between jobs rather than value tied to one build (see Plant & Equipment Insurance).

Two insurance 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 meant to cover everyone on the project, so nobody underneath is relying on someone else's policy 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 build cost increasing while the project runs. 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). A sum insured set at day one and never revisited 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. On some of the wordings we place, the variations and escalation buffer, the one sized for a job that grows, defaults to 20 per cent. Those percentages are set against the project value the insurer was given at the start, and a higher sub-limit has to be asked for rather than volunteered (see how contract works sub-limits are set). Every variation you sign is a reason to check the number.

On a partial loss, 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). On a total loss, the policy pays the full sum insured. If that no longer matches the cost to rebuild the works from where they stood, you fund the difference on top of losing the project's progress.

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 worrying you. The one that matters most here: does your sum insured still match what the job will 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.

Builders and small construction companies running multiple projects through the year usually suit an annual construction policy, so a new job within the policy's maximum project value and build period doesn't need a new policy application.

Owner-builders in Queensland commonly have no cover at all and don'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 unless you arrange your own contract works policy. With no lender or head contract forcing the point, as there is for licensed builders, arranging that policy is 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, 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, what you pay subcontractors is how your liability insurer rates the risk of one of them being hurt on your site. On many wordings that declaration is what switches the cover on, as set out in If a subcontractor is hurt on your job, can you be held liable?.

Assuming you're covered because "there's a policy" somewhere on the project. It's the single most expensive mistake.

Confusing QBCC Home Warranty Insurance with contract works insurance. 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 such as fire, storm, or theft while it's underway, regardless of who's at fault, so having one does not mean you have the other.

Letting the sum insured go stale. A figure that matched the contract price on day one can be well short of what it costs to finish by month nine.

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, so tell your broker as soon as a delay looks likely.

Assuming the policy pays for fixing your own faulty work. It generally doesn't: the policy won't pay to fix faulty design, materials, or workmanship itself. Where it's 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.

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 policy extends to in that window, because "extended maintenance" and "guaranteed maintenance" wordings cover different things. If you're still inside that period, don't let your contract works and liability cover lapse the day the builders pack up.

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 unloaded. Check whether your policy extends to materials in transit and in storage, not just what's on site.