Identify insurance gaps
If you’ve ordered materials before a job starts, you may not be covered by your contract works insurance, because cover begins on the date work starts or the date of the policy, whichever is latest
With prices rising and supply chains stretched, it’s tempting for builders to pre-order materials to secure a lower price. Those materials will need to be stored somewhere, which puts them at risk of being stolen or damaged.
If the materials are for a specific job, arranging contract works insurance early won’t cover them before work starts on site. That’s because cover begins on the date of the policy or when work starts, but the latter of the two. Your insurer would need to specifically agree to this, which may be tricky if the work isn’t due to begin for weeks or months.
Who owns the materials could affect how they’re insured. For example, if the homeowner owns them (perhaps because they have paid your invoice –your contract would need to be clear on this point), they could look to add them under their contents insurance.
If you own the materials, they could be insured under a material damage policy. If you already have one of these, it should be simple to increase the sum insured, perhaps just for the short period of time before the job starts. Even a tools/mobile assets policy will generally also cover stock and materials, as long as they are included in the sum insured.
If you don’t have a current policy, it’s wise to take one out. If you add materials to an existing policy or take out a new one to cover them, the insurer will want to know details about how the materials are secured. For example, are they visible from the road, are they fenced off or, if they’re stored in a container, what sort of lock does it have?
Lastly, if projects are delayed, make sure the contract works insurance is extended. If a claim happens after the end date on the policy, you may have no cover.
In a Nutshell
If you’re storing materials in advance of a project starting, make sure that they are properly insured.
The information presented in this article is general in nature and not intended to be financial advice for individual situations. You should speak to an expert about your specific circumstances and needs.