Potentially.

Work performed by subcontractors can form part of the insured construction works under a Contract Works Insurance policy.

The treatment depends on the policy, project and construction contract.

What should be checked? #

Relevant matters can include:

• Whether the subcontracted work forms part of the insured project
• Whether its value is included in the declared contract value
• Which parties are insured
• Contractual requirements
• Defective workmanship exclusions
• Design exclusions or restrictions

What about defective work? #

Contract Works Insurance should not be assumed to pay simply to correct defective workmanship.

Depending on the wording, the policy can distinguish between:

• The cost of correcting the defective work itself
• Resulting physical damage to other insured property

The treatment varies considerably between policies.

Does this replace the subcontractor’s own insurance? #

No.

A subcontractor being involved in an insured Contract Works project does not automatically mean all of their liability exposures are insured.

Builders and principal contractors commonly require subcontractors to maintain their own Public Liability Insurance.

Current Certificates of Currency and contractual insurance requirements should form part of the subcontractor review process.

You can also read more about engaging subcontractors.

Contact our team if you need help reviewing subcontractor insurance arrangements.