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Construction & Trades Insurance

Q: Do I need my own insurance if the main contractor has site cover?

Yes. A principal contractor's site policy covers the works under construction but typically does not extend full protection to subcontractors. As a subcontractor, you need your own public liability insurance to cover your own actions and negligence. Many principal contractors now require subcontractors to provide evidence of their own cover before work begins.

Q: What is contract works insurance and do I need it?

Contract works insurance (also called construction all risks or CAR insurance) covers the physical works under construction against loss or damage from events like fire, storm, flood, theft and accidental damage during the construction period. It can be arranged by either the contractor or the project owner. For larger projects, it is typically a contractual requirement. Even for smaller residential projects, it's strongly recommended as standard property policies don't cover works under construction.

Q: My employee was injured on site — does ACC cover everything?

ACC covers medical treatment and partial income replacement for work injuries in New Zealand, but it does not compensate for all economic losses. Employer's liability insurance covers claims by employees for losses beyond what ACC provides, including claims for exemplary damages, injury through employer negligence or injuries not fully covered by ACC. It also covers legal defence costs.

Q: Does public liability cover faulty workmanship?

Standard public liability policies cover property damage and personal injury caused by your workmanship, but typically exclude the cost of repairing or replacing the defective work itself. For example, if a faulty installation causes a flood that damages a client's kitchen, the damage to the kitchen would be covered but the cost to redo your own work would not. Some policies offer a defective workmanship extension — ask your broker if this is appropriate for your trade.

Q: How much public liability cover do I need for construction work?

Most New Zealand construction contracts require a minimum of $1 million or $2 million public liability. Government and council contracts often require $5 million or $10 million. For larger commercial or infrastructure projects, $20 million may be required. Your broker can advise on appropriate limits based on the contracts you typically tender for.

Robust insurance for builders, contractors and tradespeople

The construction and trades sector carries some of the highest physical risk of any industry. Working with heavy machinery, at height, on third-party property and with significant project values, NZ builders and contractors need insurance that keeps pace with the scale and complexity of each job. From sole-trader plumbers to multi-site construction companies, having the right cover in place protects your business, your clients and your people.

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Recommended Insurance for Construction & Trades

Public Liability Insurance

Protect your business from third-party injury and property damage claims.

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Professional Indemnity Insurance

Protect your business when clients claim your advice or services caused them loss.

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Employers Liability Insurance

Cover for employee claims that fall outside ACC — protecting employers from personal liability.

Learn more

Statutory Liability Insurance

Cover for unintentional breaches of New Zealand law — including regulatory investigations and fines.

Learn more

Commercial Property Insurance

Protect your business premises, contents, and assets from damage and loss.

Learn more

Key Coverage for Construction & Trades Businesses

Public Liability Insurance — covers third-party injury or property damage on job sites
Contract Works Insurance — covers the works under construction against damage or loss
Tools and Equipment Insurance — covers your owned or hired plant and tools
Statutory Liability Insurance — essential given WorkSafe NZ's active enforcement role
Employer's Liability Insurance — covers claims from injured workers beyond ACC
Professional Indemnity Insurance — important for design-and-build contractors or project managers

Unique Risks for Your Industry

→Third-party property damage during excavation, demolition or construction
→WorkSafe NZ investigations following site accidents or fatalities
→Defective workmanship claims arising after project completion
→Theft of tools and plant from unattended sites
→Subcontractor liability — being held responsible for a subcontractor's negligence

Typical Premium Range

$2,500 – $20,000+ per year depending on annual contract value and trade type

Premiums vary significantly based on your revenue, number of employees, claims history, specific activities and chosen cover levels. These figures are indicative guides — get a tailored quote for accurate pricing.

Insurance for Construction and Trades Businesses

Construction and trades businesses — builders, electricians, plumbers, roofers, engineers, and project managers — work in some of the most physically hazardous environments of any sector. Large contract values, work on third-party property, WorkSafe NZ's active enforcement role, and the long-tail liability of defective workmanship claims create an insurance requirement that demands specialist advice.

The Foundation: Public Liability on Every Job Site

Every contractor and tradesperson working on client property needs public liability insurance. If your operations cause accidental injury to a third party, or damage to a client's property, public liability responds with legal defence and compensation costs.

Common construction and trades claims include excavation damaging neighbouring structures, scaffolding or materials falling and injuring passers-by, water damage from plumbing work, fire spread from welding or hot work, and damage to client property during installation.

How Much Cover Do You Need?

Residential work: $1–2 million (most main contractor and lease requirements)
Commercial construction: $5–10 million (standard commercial contracts)
Government and infrastructure: $10–20 million (required by contract)

Many principal contractors require evidence of public liability before subcontractors start work. Operating without it — or with insufficient limits — can prevent you from tendering for contracts.

The Works Under Construction: Contract Works Insurance

Contract works insurance (construction all risks or CAR insurance) covers the physical work being built against loss or damage — distinct from public liability, which covers damage to third parties. It covers fire, storm, flood, theft of materials, and accidental damage during construction.

Contract works can be arranged by the contractor or the project owner. Your contract will specify who must arrange it. Always confirm whether your contract requires CAR cover and to what value.

WorkSafe NZ: Your Statutory Liability Exposure

The Health and Safety at Work Act 2015 fundamentally changed the enforcement landscape for construction. WorkSafe NZ actively investigates serious incidents, near-misses, and systemic safety management failures.

Statutory liability insurance covers:

WorkSafe investigation and prosecution defence costs
Fines under the HSWA (where legally insurable)
Investigations under other legislation (Resource Management Act, Building Act)

WorkSafe prosecution defence costs can reach $300,000–$500,000 for complex cases. Even where you are acquitted, you fund your own defence without statutory liability cover.

Directors and senior managers of construction companies can face personal prosecution under the HSWA. Directors and officers liability insurance provides personal protection for individuals responsible for health and safety governance.

Employee Injury: Employers Liability

Construction and trades carry the highest rates of serious workplace injury of any sector. ACC covers most personal injury from accidents, but employers liability insurance addresses the gaps: gradual process injuries, occupational disease, mental health claims linked to workplace conditions, and situations where ACC status is disputed.

Tools, Plant, and Equipment

Your tools and plant are your income. Commercial property insurance (or a specific tools and plant policy) protects against theft, loss, and accidental damage. Consider coverage at job sites, in transit, and at your yard — and confirm sub-limits for tools stored in vehicles overnight.

Professional Indemnity for Design-and-Build Contractors

If your work includes any design element — structural engineering, architectural input, specification writing, or project management — you carry professional liability exposure. A design error that leads to building failure or remediation costs can generate a professional indemnity claim running into millions.

Subcontractor Risk Management

If you engage subcontractors, require them to carry their own public liability and relevant covers, check certificates of currency before work begins, and ensure your own policy has appropriate subcontractor provisions.

Business Interruption for Larger Operators

If a fire at your yard destroys your equipment, or a major project goes on hold due to an insured loss, business interruption insurance replaces your lost income during the recovery period. For operators with ongoing project revenue, this cover can be the difference between business survival and failure.

Typical Premium Ranges

Sole-trader tradesperson: $1,500 – $4,500 pa (combined package)
Small building company (< $2M revenue): $3,000 – $12,000 pa
Medium commercial builder ($2M–$10M revenue): $10,000 – $40,000 pa
Large construction company: $30,000 – $150,000+ pa

A specialist broker understands construction policy wordings — including subcontractor provisions, defective workmanship exclusions, and contract value declarations — and can structure a programme that actually responds when you need it.

See: professional services insurance, manufacturing insurance, statutory liability, and employers liability.