Does Contract Works Insurance Cover Flood Damage?

Does Contract Works Insurance Cover Flood Damage? Everything You Need to Know

When you’re working on a construction project, one unexpected storm or flooding event can cause major and costly damage. Materials can be destroyed, partially built works can collapse, and delays can push your project over budget. This is why many builders and tradies ask:

“Does Contract Works Insurance cover flood damage?”

The short answer is:

✔ Yes, Contract Works Insurance typically covers flood damage by default.

However, this can change if a specific endorsement is added to exclude flood.

Let’s break this down so you know exactly what you’re protected against.

Does Contract Works Insurance Include Flood Cover?

Most Contract Works Insurance policies automatically include flood cover as part of the overall protection for the works, unless:

• The insurer specifically excludes it
• You have opted for a flood exclusion to reduce premium
• Your project is in a high-risk flood zone and the insurer declines the flood component

If there is no exclusion or endorsement, then flood is considered a standard insured event alongside:

• Storm
• Rainwater
• Fire
• Vandalism
• Accidental damage
• Theft (varies)
• Malicious damage

So by default, yes, your works are protected against flood.

When Flood Might Not Be Covered

Even though flood cover is typically included, some insurers may add a Flood Exclusion Endorsement, which removes flood as an insured event.

This might be added when:

• Your project location has a history of flooding
• The site is near rivers, lakes, creeks, or low-lying areas
• The premium becomes significantly higher if flood is included

Always check your policy schedule for wording like:
“Excluding Flood” or “Flood Endorsement: Not Covered.”

If you see this, you do not have flood cover.

Why Flood Cover Matters More Than Ever

Australia has experienced increased flooding events in recent years. For builders, this means:

• Partially completed work is extremely vulnerable
• Excavations can fill with water
• Slab work can be impacted
• Frames can shift, warp, or collapse
• Stored materials can be destroyed
• Delays cost money, labour, and reputation

A single flood event can cost tens or hundreds of thousands of dollars.

What Flood Damage Can Claim Under Contract Works Insurance?

If flood is included (no exclusion endorsement), your policy can cover:

✔ Damage to the project under construction

Example: A flood damages frames, trusses, insulation, or internal install materials.

✔ Damage to materials stored on-site

Example: Timber, tiles, appliances or fixtures ruined by rising water.

✔ Damage to temporary structures

Example: Scaffolding (if included), or temporary fencing.

✔ Costs to repair, replace, or redo works

Contract works cover is designed to restore the job back to where it was pre-loss.

Each policy is different, but generally the protection is extensive if flood is included.

What Flood Cover Does Not Include

Even with flood included, your insurer may not cover:

• Poor workmanship
• Incorrect site drainage design
• Landscaping or soils that aren’t part of the contract
• Tools (covered under a separate Tools/Equipment policy)

A broker can review this for you and explain any gaps.

How to Check if You Have Flood Cover

To confirm whether your Contract Works Insurance includes flood:

1. Check your policy schedule
   Look for an endorsement list.
2. Read the policy wording section: “Insured Events”
   Flood should be listed, unless excluded.
3. Look for exclusions like:
   • “Flood Excluded”
   • “No cover for flood”
   • “Endorsement: Flood Not Included”
4. Ask your broker to review the policy
   They’ll confirm in minutes.

Why Using a Broker Helps, Especially With Flood Cover

Brokers understand the fine print and can identify whether flood is:

• Included automatically
• Excluded by endorsement
• Optional for an extra premium
• Required by your contract

Most importantly, a broker can negotiate with insurers, especially in high-risk areas.

Why Morgan Insurance Brokers Is the Best Choice for Contract Works Insurance

At Morgan Insurance Brokers, we are construction insurance specialists. We help builders, tradies, and contractors secure the right protection, including flood, without paying unnecessary premiums.

Here’s why our clients trust us:

• ✔ We compare multiple insurers
• ✔ We identify hidden exclusions (like flood endorsements)
• ✔ We tailor cover to your exact project requirements
• ✔ We help you understand what’s included and what’s not
• ✔ We assist you throughout the claims process
• ✔ We save you time, stress, and expensive mistakes

When it comes to flood cover, the details really matter, and we make sure you’re never left exposed.

Conclusion: Yes, Contract Works Insurance Usually Covers Flood, But Always Check.

Most builders assume flood is excluded, but the reality is Flood is usually included automatically But an exclusion endorsement can remove it without you realising.

The safest approach is to have a broker review your policy so you’re not caught off guard when a claim occurs.

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by lauren

A Complete Guide to Contract Works Insurance

When you work in the building and construction industry, every project carries risk. Whether you’re building a new home, renovating a kitchen, pouring concrete, or installing plumbing, unexpected events like fire, theft, storm damage or accidental loss can cause major financial setbacks.

That’s where Contract Works Insurance comes in.

This guide breaks down what contract works insurance is, who needs it, what it covers, what to consider before buying it, and why using a broker, especially Morgan Insurance Brokers can save you serious money and stress.

What Is Contract Works Insurance?

Contract Works Insurance protects builders, tradespeople, and subcontractors from loss or damage to a construction project during the build phase.

If something goes wrong, fire, theft, storm, vandalism, accidental damage, materials stolen on-site this policy ensures you’re not left footing the bill.

What Contract Works Insurance Covers

While policies can vary, most contract works policies include:

✔ Damage to the construction project

Including:

• Fire
• Storm
• Flood (if included)
• Water damage
• Vandalism
• Malicious damage
• Accidental damage
• Collapse

✔ Materials, fixtures, and fittings

Whether already installed or stored on-site.

✔ Theft of building materials

If you store materials on-site or off-site, they can be covered under the policy.

✔ Tools and equipment (optional add-on)

Tools are usually covered separately, so you may add:

• Theft of tools
• Accidental damage
• Items stored in vehicles or on-site

✔ Public Liability (optional add-on)

Protects you if:

• You injure someone
• You damage someone’s property
• You’re sued by a third party

Often included as part of a combined Contract Works & Public Liability policy.

✔ Items in transit (optional)

Covers materials and equipment being transported from your premises to the job site.ws

Who Actually Needs Contract Works Insurance?

Any trade or business involved in construction, renovation, or structural work can need contract works insurance. This includes:

Common occupations that require or benefit from Contract Works Insurance:

• Builders
• Carpenters
• Plumbers
• Electricians
• Formworkers
• Concreters
• Bricklayers
• Scaffolders
• Landscapers
• Roofers
• Tilers
• Cabinetmakers
• Shopfitters
• Renovation specialists
• Labourers / subcontractors
• Project managers / construction managers
• Civil contractors

Occupations that may still need it depending on the job:

• Handymen
• Painters
• Plasterers
• Fencers
• Flooring installers
• Pool builders
• Solar installers

If you’re involved in building, modifying, or installing something on a client’s site, you may be responsible for it until handover.

Are You Contractually Responsible to Insure the Site?

Many builders and trades don’t realise this:

If the site catches fire during construction, who pays?

You might think:
"It’s not my fault—why would I pay?"

But legally and contractually:

Most clients expect the builder or contractor to insure the works.

And most contracts (like HIA and QBCC contracts) clearly state that the builder must insure the project until completion/hand-over.

So if:

• A fire destroys the frame
• A storm damages partially built works
• A thief steals materials
• Vandalism destroys newly installed items

You may be responsible for the cost.

Contract Works Insurance ensures you don’t have to pay out-of-pocket.

Key Questions to Ask Yourself Before Buying a Policy

1. Is your client expecting you to insure the project?

Check your contract.
Most clients assume you will.

2. Do you want cover for fire, storm, accidental damage?

Vital for projects of any size.

3. Do you want cover for theft of your materials?

If you store materials on-site, theft cover is essential.

4. Do you want cover for theft of your tools?

Tools are the #1 most stolen item from worksites.
A tool insurance add-on can save thousands.

5. Do you need public liability included?

Many contractors choose a combined Public Liability + Contract Works package.

6. Do you need items in transit covered?

Especially important if you transport:

• Materials
• Tools
• Machinery

How to Obtain Contract Works Insurance

There are three ways:

1. Directly from an insurer

But you may get:

• Limited coverage
• Higher premiums
• No advice
• No help at claim time

2. Online platforms

Convenient, but risky if you don’t understand the policy wording.

3. Through an insurance broker (the best option)

A broker can:

• Compare multiple insurers
• Negotiate pricing
• Tailor the cover to your trade
• Ensure you meet contract requirements
• Help you at claim time

Why Using a Broker Is the Smartest Choice

Insurance policies are full of exclusions and tricky clauses.

A professional broker:

• Makes sure your contract works policy is compliant
• Ensures you won’t accidentally breach your contract with the client
• Recommends the right levels of cover
• Helps you avoid paying for things you don’t need
• Manages claims and fights on your behalf

Why Morgan Insurance Brokers Is the Best Choice

Morgan Insurance Brokers specialises in construction insurance. Here's why clients trust us:

✔ We compare quotes from multiple insurers

Not just one.

✔ We understand builder and trades contracts

We make sure your policy matches your legal obligations.

✔ We tailor policies to your exact trade

No generic cover, you get what you need.

✔ We manage claims for you

You’ll never deal with an insurer alone.

✔ We save you time and money

So you can focus on the job, not paperwork.

✔ We give tradespeople the cover they actually need

Not unnecessary add-ons.

Conclusion: Protect Your Work, Your Tools, and Your Business

Contract Works Insurance isn’t just another box to tick, it protects your livelihood.

Whether you're a builder, concreter, carpenter, plumber, or any other trade, the risks are real:

• Fire
• Storm
• Theft
• Accidental damage
• Vandalism

One incident could cost tens or hundreds of thousands.

With the right policy in place and the right broker your project, equipment, and reputation are protected.

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by lauren

Insurance Checklist for Starting a New Construction Business

Starting a construction business is an exciting step, but it also comes with serious risk. Whether you’re launching a civil construction company, plumbing business, carpentry firm, or general building operation, the first thing you must get right is your insurance.

Construction is one of the highest-risk industries in Australia. One accident, damaged tool, or contract dispute can put a new business in financial trouble within days. The good news? With the right construction insurance setup, you can protect your business from unexpected costs and meet the requirements of builders, councils and commercial clients.

This step-by-step insurance checklist will guide you through exactly what you need before starting work.

Step 1: Public Liability Insurance (Mandatory for All Construction Businesses)

Public Liability Insurance protects your business if your work causes accidental injury or property damage to someone else.
It’s the first policy every new construction business must have.

Why new construction businesses need it:

• Most builders and councils won’t let you on site without it
• Covers claims from clients, other tradies, or the public
• Some contracts force subcontractors to take responsibility for all incidents onsite, even those not caused by them

Step 2: Contract Works Insurance (Crucial for Builders & Trades)

Contract Works Insurance protects the project you are working on from accidental damage.

It covers:

• Damage to the building works
• Materials and tools onsite
• Theft, fire, storms, flood (if included)
• Vandalism
• Collapse, accidental damage
• Delays caused by insured events

If you’re in building, carpentry, concreting, formwork, civil works, or renovations, this cover is vital.

Step 3: Tools, Plant & Equipment Insurance

Construction businesses rely heavily on tools and machinery. Losing them to theft or damage can stop your new business instantly.

This policy covers:

• Power tools
• Trailers
• Toolboxes
• Excavators
• Skid steers
• Tippers
• Attachments
• Small plant

It protects against theft, accidental damage, breakdown (optional), and rollover incidents.

If you hire machinery, ensure you have Hired-In Plant cover, many hire contracts make you responsible for any damage.

Step 4: Commercial Vehicle or Fleet Insurance

Your ute, van or truck is one of your most important business assets.

Commercial Motor Insurance covers:

• Accidental damage
• Theft
• Windscreen replacement
• Trade tools kept in the vehicle (if added)
• Signwriting
• Hail & storm

If you’re towing machinery or operating tippers or water carts, you’ll need a specialised commercial motor policy.

Step 5: Workers Compensation

Workers Compensation is mandatory if you employ anyone — even one apprentice or casual labourer.

It covers:

• Worker injuries
• Lost income
• Medical bills
• Rehabilitation

Step 6: Management Liability Insurance

Many new construction business owners don’t realise they can be personally sued for:

• WHS breaches
• Mismanagement
• Employee claims
• Fair Work allegations
• Subcontractor disputes

Management Liability Insurance protects the director(s) and the business itself.

This policy becomes essential as soon as you:

• Hire workers
• Begin managing subcontractors
• Take on commercial projects
• Handle WHS responsibilities

Step 7: Professional Indemnity Insurance (If You Give Advice or Design)

If your business provides:

• Plans
• Site layout advice
• Engineering input
• Project management
• Specification changes
• Surveying
• Inspections

…you may need Professional Indemnity Insurance.

Professional Indemnity Insurance protects your business from claims arising from advice or professional errors, even if you’re not officially an “engineer” or “designer.”

Step 8: Business Insurance Package (For Offices, Storage Sheds & Workshops)

If you operate from a workshop or commercial premises, consider a Business Insurance Package that covers:

• Contents
• Stock & materials
• Buildings
• Machinery
• Break-ins & vandalism
• Glass
• Money
• Portable tools

This is especially important if you store high-value items or materials at your office, orr shed.

Step 9: Review Contracts Before Starting Any Job

This is one of the most overlooked steps by new contractors.

Construction contracts often include clauses that make the subcontractor responsible for:

• All injuries onsite
• Damage caused by others
• Underground service strikes
• Delay costs
• Liquidated damages
• Indemnity for the builder

Before signing:
✔ Have the contract reviewed
✔ Ensure your insurance matches the contract requirements
✔ Check your policy limit is adequate

This protects you from claims that insurers may reject if the contract wasn’t disclosed.

Step 10: Partner With a Construction Insurance Specialist

A generalist broker may not understand complex construction risk.

A specialist construction insurance broker can:

• Review your contracts
• Recommend the right policies
• Help you meet builder/council requirements
• Avoid exclusions that could void your cover
• Assist you with claims
• Build a tailored package for your trade

Morgan Insurance Brokers works with:

• Builders
• Plumbers
• Civil construction contractors
• Earthmovers
• Electricians
• Carpenters
• Concreters
• All construction-related trades

Final Thoughts: Set Your Construction Business Up for Success

Starting a new construction business is exciting, but without the right insurance, one incident can shut down your operations before you even get off the ground.

By following this step-by-step insurance checklist, you can:
✔ Protect your assets
✔ Meet contract requirements
✔ Avoid uninsured losses
✔ Win bigger tenders
✔ Build long-term business stability

Need Insurance for Your New Construction Business?

Get advice from a specialist who understands the industry. Contact Morgan Insurance Brokers

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by lauren

Insurance Subcontractors Need Before Signing a Construction Contract

What Insurance Do Subcontractors Need Before Signing a Construction Contract?

In today’s construction industry, subcontractors are often required to sign detailed and sometimes onerous contracts before starting work. These agreements, especially those issued by Tier 1 builders, government bodies, and large commercial developers, can transfer significant risk onto you as the subcontractor.

Before you sign anything, it’s crucial to ensure you have the right insurance cover in place to protect your business, your workers, your machinery, and your financial security.

Below is a practical guide to the essential insurance policies subcontractors should have before agreeing to any construction contract.

Public Liability Insurance (Mandatory for All Subcontractors)

Public Liability Insurance protects your business if your work causes accidental injury to another person or damage to their property. This is the insurance most commonly required in subcontractor agreements.

However, and this is the part many contractors miss, not all Public Liability policies cover contractual liability.

Why this matters:

Construction contracts often include clauses such as:

• Indemnities
• “Hold harmless” agreements
• Liability assumed even when you’re not at fault
• Responsibility for all incidents on site
• Damage caused by other subcontractors

If your policy does not cover these expanded liabilities, your insurer can refuse to pay.

Before signing any contract:

✔ Check if your Public Liability includes Contractual Liability extensions
✔ Review height and depth limits
✔ Check underground services exclusions
✔ Ensure the policy limit meets contractual requirements ($10m, $20m, etc.)

Contract Works Insurance (Often Required for Builders & Trades)

Most construction contracts require subcontractors to carry Contract Works Insurance, especially for works involving structure alterations, renovations, civil works, or new builds.

More info: Contract Works Insurance

What Contract Works Insurance Covers:

• Damage to the project under construction
• Materials on site
• Fire, storm, theft, vandalism
• Collapse, accidental damage
• Tools and equipment (if added)

If your subcontract includes responsibility for the project works until handover, you must ensure your policy reflects that requirement.

Contractors Plant & Equipment Insurance

Civil construction businesses, earthmovers, plumbers, and builders often use:

• Excavators
• Skid steers
• Loaders
• Tippers
• Trailers
• Attachments
• Small plant & tools

These items are expensive to repair or replace, and construction sites are high-risk environments for theft and accidental damage.

Plant & Equipment Insurance covers:
✔ Theft
✔ Accidental damage
✔ Rollovers
✔ Transit damage
✔ Breakdown (optional)
✔ Hired-in plant obligations

If your contract states you are responsible for damage to hired machinery, this coverage is essential.

Workers Compensation (Required for Any Business With Employees)

If you employ staff, even just one labourer, you must hold Workers Compensation insurance.

Contracts often require proof before you can begin work onsite.

Management Liability Insurance

(Subcontractors Often Overlook This)

Many construction contracts include obligations around:

• WHS compliance
• Employment practices
• Subcontractor management
• Regulatory adherence

Management Liability Insurance protects the business owner and directors from claims relating to:
✔ WHS breaches
✔ Employee claims
✔ Mismanagement allegations
✔ Fines & penalties (where insurable)

This is becoming increasingly important as regulators crack down on construction safety.

Professional Indemnity Insurance (If You Provide Any Advice or Design)

If you provide or modify:

• Plans
• Engineering drawings
• Construction advice
• Surveying
• Design input
• Specification changes

…then you may be liable for errors in that professional advice, even if you're not a “designer.”

Professional Indemnity Insurance protects you from:
✔ Design errors
✔ Incorrect advice
✔ Project losses caused by your guidance
✔ Legal costs defending a claim

Contract Review: Why It’s Essential Before You Sign

Before signing any construction contract:

1. Read all indemnity and liability clauses
2. Check insurance requirements
3. Send a copy to your insurance broker for review
4. Ensure your policy limits and coverage match contract terms
5. Confirm your Public Liability includes contractual liability

Morgan Insurance Brokers can review your contract and insurance to ensure there are no dangerous gaps.

 

Final Thoughts: Protect Yourself Before You Sign

Subcontractor contracts are becoming more complex, and many include hidden clauses that shift significant liability onto you.
Before signing, ensure you have the correct insurance in place, especially Public Liability with Contractual Liability Insurance cover and Contract Works Insurance.

Getting this right can be the difference between a smooth project or a financially devastating claim.

Need Help Reviewing Your Contract or Insurance?

Morgan Insurance Brokers specialises in construction insurance and can ensure your policy aligns with your contract obligations.

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by lauren

Why Subcontractors Need Public Liability Insurance That Covers Contractual Liability

The Hidden Risk Inside Construction Contracts With Tier 1 Builders

In the construction industry, subcontractors regularly enter into agreements with Tier 1 builders and large commercial contractors. These contracts often include complex clauses that shift significant liability onto smaller subcontractors, even when they are not at fault.

For civil contractors, plumbers, builders, and trades signing into these agreements, the wrong insurance setup can leave your business dangerously exposed.

In this blog, we break down why Public Liability Insurance with Contractual Liability cover is essential and how it protects you when your contract places responsibility on you for incidents outside your control.

The Problem: Contracts Often Shift Liability Onto Subcontractors

It’s a common industry practice: Tier 1 builders insert clauses that make subcontractors responsible for all incidents on site, including those not caused by them.

Real Example:

A civil construction subcontractor signs a contract with a Tier 1 builder for a major commercial project.
Buried within the contract are onerous terms stating that the subcontractor is liable for any injuries that occur on the work site, regardless of who is at fault.

During the project, a site visitor is injured in an unforeseen accident.
The subcontractor followed every safety protocol.
They weren’t involved, weren't supervising the area, and didn't cause the incident.

But the contract says they are liable, so they are.

Without the correct insurance, the subcontractor could be forced to pay for:

• Medical costs
• Legal defence fees
• Compensation payouts
• Ongoing litigation expenses

These costs easily reach tens or hundreds of thousands of dollars.

Why Public Liability Insurance Matters

Public Liability Insurance protects subcontractors when their work causes accidental injury, property damage, or financial loss to others.

Learn more:
👉 Public Liability Insurance

But here’s the critical detail many subcontractors miss:

Most Public Liability policies do NOT automatically cover contractual liability.

If your contract says you’re responsible for incidents beyond your normal legal liability, your policy may refuse the claim unless you’ve disclosed and insured those obligations.

Contractual Liability Cover: Your Safety Net

A Public Liability policy with Contractual Liability extensions can protect you when:

• The contract transfers additional liability to you
• You sign indemnity clauses
• You agree to “hold harmless” the head contractor
• You become responsible for incidents you didn’t directly cause
• You must pay legal fees for claims you weren’t at fault for

Without this extension, your insurer may decline the claim, leaving you personally exposed.

Who Needs Contractual Liability Cover?

This applies to any trade that signs into construction contracts, including:

Civil Construction Contractors

High-risk environments, heavy machinery, and multi-contractor sites make liability exposure significant for civil contractors. When creating your civil construction insurance package, contractual liability should be considered.

Builders & Construction Companies

Many builder agreements include indemnities and unreasonable liability assumptions.

Plumbers & Trades Completing Contract Work

Subcontractors working under builders are often required to accept broad liability obligations.

Demolition & Excavation Contractors

High-risk worksites often contain strict insurance and liability requirements.

Why Contract Review Is Critical Before Signing

Before signing any construction contract, subcontractors should:

1. Have the contract reviewed (preferably by a solicitor or broker).
2. Identify any indemnity clauses or “hold harmless” wording.
3. Ensure your Public Liability Insurance policy matches the contract requirements.
4. Confirm you have Contractual Liability cover where needed.

This proactive approach reduces the risk of claim rejections and unexpected liability.

Final Thoughts

Construction contracts with Tier 1 builders often shift significant liability onto subcontractors, even when they’re not at fault. This makes Public Liability Insurance with Contractual Liability coverage absolutely essential for civil construction workers, plumbers, builders, and trades.

The right policy can protect your business from devastating financial losses and ensure your contract obligations are fully covered.

Need to Review Your Policy or Contract?

Morgan Insurance Brokers specialises in construction insurance and can help you ensure your coverage aligns with your contractual obligations.

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by lauren