When beginning a new construction or renovation project, there’s a critical—but often overlooked—feature builders need to get right: insurance cover for existing structures. Navigating this part of your insurance can make a substantial difference to your risk exposure and help ensure projects run smoothly, even if things go wrong.
What Are Existing Structures?
Existing structures refer to any buildings or other permanent fixtures already on a project site before a single tool is lifted for construction. Unlike new builds, these structures are often at risk during the works, and their protection requires careful consideration within your insurance planning.
Who Is Responsible For Insurance?
Typically, it is the property owner’s responsibility to insure their assets. However, building contracts occasionally assign this responsibility to the builder during the construction period. To avoid future disputes, both parties should clarify—and document—who will maintain insurance cover for existing structures before any work begins.
Review insurance clauses in the building contract to determine responsibility.
Check whether the owner’s property insurance will continue during construction.
Decide if the Contract Works Insurance policy should be extended to existing structures, and have that officially listed in the schedule.
Common Gaps and Misconceptions
Many builders assume that Public Liability Insurance will automatically cover all damage to existing structures. In fact, Public Liability only responds if the builder is found legally liable—meaning negligence must be proven. Damage from severe weather, unexpected fire, or other uncontrollable events normally sits outside this cover.
Standard property insurance also often excludes or limits coverage for damage that occurs during construction. Owners assuming their usual property policy will suffice could be unpleasantly surprised by claim denials during building works. Always confirm with the insurer if existing structures will remain protected throughout the project.
How To Arrange Proper Cover
To avoid dangerous coverage gaps:
Secure clear agreements in writing before work starts, detailing who insures existing structures and under what policy.
If cover is required under Contract Works Insurance, seek insurer approval before work begins and have it documented in the contract.
Ensure the sum insured for existing structures is clearly stated on the insurance schedule.
Key Takeaways for Builders
Clarify insurance with the property owner and document responsibilities upfront.
Don’t assume that Public Liability will cover all risks.
Have insurance arrangements checked, agreed, and written into the contract.
Obtain insurer approval when extending cover under a Contract Works policy to existing structures.
Keep all documentation up-to-date to prevent future disputes.
Proactive insurance planning is the best way to keep your next project safe from financial and legal headaches. For advice about Contract Works Insurance and making sure existing structures are properly protected, the team at Auswide Insurance Brokers is here to help.
For tailored advice, reach out to Auswide Insurance Brokers and ensure your next construction project is fully protected.
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