Insurance for New Builds

Construction Insurance (Contract works)

New home build insurance, often referred to as construction insurance or builder’s risk insurance, is a type of insurance coverage designed to protect homeowners, builders, and contractors during the construction of a new home. This type of insurance addresses the unique risks associated with the construction phase, providing coverage for potential damages, accidents, and other unforeseen events. Here are key aspects of new home build insurance:

  1. Property Coverage:
    • Property Damage: Protects the structure of the new home and materials on-site against perils such as fire, burglary, vandalism, and certain natural disasters.
    • Builder’s Risk Coverage: Also known as Course of Construction Insurance, it covers the property from the start of construction until completion.
  2. Liability Coverage:
    • Third-Party Liability: Provides protection in case of injury or property damage to third parties (e.g., visitors, neighbors) during the construction process.
  3. Builder’s Liability:
    • Offers protection for the builder or contractor against legal and financial consequences related to their work on the construction site.
  4. Construction Materials:
    • Coverage extends to construction materials and supplies on-site, protecting them from theft, damage, or vandalism.
  5. Equipment Coverage:
    • May include coverage for construction equipment and tools used on the job site.
  6. Builder’s Tools:
    • Protects the builder’s tools and equipment against burglary or damage while on the construction site.
  7. Project Duration:
    • The policy typically covers the entire construction period, from groundbreaking to completion. It may also include coverage for a specified period after completion.
  8. Subcontractors and Workers:
    • Liability coverage often extends to subcontractors and their workers who are part of the construction project.
  9. Deductibles and Premiums:
    • Policies may include deductibles, and premiums are determined based on factors such as the value of the new home, the construction timeline, and the level of coverage needed.
  10. Notification Requirements:
    • Homeowners and builders are typically required to inform the insurance provider about the new construction project before it commences.
  11. Vacancy Considerations:
    • If the new home will be vacant during construction, homeowners may need to consider additional coverage if they move into the property before the project reaches practical completion and not forget to cover the property for full insurance when the project is at a certain point under construction.
  12. Additional Coverages:
    • Depending on the policy, additional coverages may be available, such as debris removal, and coverage for changes in construction costs.
  13. Working with Professionals:
    • It’s essential to work with insurance professionals who specialise in construction insurance to ensure that the policy adequately addresses the unique risks of a new home build.

Before starting a new home construction project, homeowners, builders, and contractors should carefully review their insurance needs and obtain appropriate coverage to protect against potential risks and liabilities during the construction process. Consulting with insurance professionals can help ensure that the coverage is tailored to the specific requirements of the new home build.

New Build Insurance (Structural Warranty)

New build insurance, often known as structural warranty or new home warranty insurance, is a specialised type of insurance coverage designed to protect homeowners and developers against certain defects and issues that may arise in a newly constructed home. This type of insurance provides coverage for structural defects during a specified period after the completion of the new build. Here are key aspects of new build insurance:

  1. Structural Defects Coverage:
    • New build insurance primarily focuses on structural defects that affect the stability and safety of the home. This can include issues with the foundation, load-bearing walls, roof, and other critical components.
  2. Coverage Period:
    • The policy typically covers a specific duration after the completion of the construction, commonly for 10 years.
  3. Builder’s Responsibility:
    • The insurance places responsibility on the builder or developer to rectify structural defects and poor workmanship during the specified coverage period.
  4. Third-Party Administrator (TPA):
    • Many new build insurance policies are administered by third-party entities that manage the claims process and ensure compliance with the policy terms.
  5. Exclusions:
    • Certain elements may be excluded from coverage, such as non-structural components, wear and tear, cosmetic issues, or issues resulting from homeowner neglect.
  6. Developer Obligations:
    • Developers may have specific obligations to register the new build with the warranty provider, provide necessary documentation, and rectify defects within a reasonable timeframe.
  7. Premiums:
    • The cost of new build insurance is often borne by the developer and may be included in the overall project costs. The premium amount can vary based on the size and type of construction.
  8. Claims Process:
    • In the event of a structural defect, homeowners or subsequent owners can file a claim with the insurance provider, and the process involves an assessment of the defect and necessary remediation.

New build insurance is crucial for providing homeowners with peace of mind and financial protection against unexpected structural issues in their newly constructed homes. It also serves as an incentive for developers and builders to adhere to high construction standards. Homeowners should carefully review the terms of the new build insurance policy and understand the coverage limitations and exclusions.