Construction projects, regardless of their size, involve significant risks.

For builders and construction professionals, ensuring these risks are insured is crucial.

Two available options for Contract Works insurance, also known construction insurance, are Single Project and Annual Contract Works policies.

In this article, we will explore the differences between these two types of coverage and highlight the potential benefits of choosing an annual policy.

What is a Single Project Policy?

A Single Project Contract Works Insurance policy is designed to cover one specific construction project. Coverage begins when work starts at the project site and ends upon practical completion or handover, as specified on the policy.

Key features include:

• Specific Project Coverage: Protects against accidental damage to the works during construction to the specified project only.
• Third-Party Liability: Offers protection against legal liabilities for personal injury and/or third-party property damage arising from the project.

However, there are some limitations to be aware of:

• Products Liability coverage is not included: Single Project policies are designed to cover the risks associated with the construction phase of a single project. Once the project is completed and handed over, the focus shifts away from the builder’s direct control, which is when Products Liability risks typically arise. Because Single Project policies conclude at practical completion, they do not account for ongoing risks from supplied products.

Single Project policies can be a suitable choice for builders who work solely on one-off projects, or need tailored coverage for unique or high-value construction works.

What is an Annual Contract Works Policy?

An Annual Contract Works Insurance policy is a comprehensive solution that provides coverage for all projects undertaken by a builder or contractor within a 12-month period. This type of policy is particularly beneficial for those managing or starting multiple projects throughout the year.

Key features include:

• Automatic Coverage: All eligible projects within the defined policy parameters are covered by the policy.
• Flexibility: Policy parameters, such as maximum project value and duration, can be adjusted during the policy period to accommodate changes.
• Continuous Protection: Ensures there are no gaps in coverage for ongoing or smaller projects.

Benefits of Choosing an Annual Policy

1. Ease of Transaction: With an annual policy, there is no need to take out multiple policies for each project, reducing administrative burden and saving time.
2. Cost-Effectiveness: Insuring multiple projects under one annual policy is typically more economical than purchasing separate Single Project policies. An annual policy will also usually attract less policy fees, such as brokerage fees and underwriting fees that can be charged on individual policies.
3. Comprehensive Coverage: An annual policy is designed to cover all projects falling within the defined parameters, reducing the risk of forgetting to insure smaller projects.
4. Enhanced Coverage: Unlike Single Project policies, Annual Contract Works policies often include Products Liability coverage, offering additional protection for the builder’s responsibilities beyond project completion.

Choosing the Right Policy for Your Needs

The decision between a Single Project and an Annual Contract Works policy depends on your business needs and operations. Builders focusing on one-off or high-value projects might find a Single Project policy suitable.

However, for those managing multiple projects throughout the year, an Annual Contract Works policy offers greater convenience, cost savings, and comprehensive protection.

Final Thoughts

Understanding the differences between these two types of policies is essential for making an informed decision. An Annual Contract Works policy is not only cost-effective but also ensures that all of your projects, big or small, are adequately insured throughout the year.

If you’re unsure which option is right for your business, our experienced team can help. We’ll review your needs and guide you toward the best policy to protect your projects and give you peace of mind.