Insurance requirements for contractors and consultants

We require contractors and consultants to have their own insurance cover for professional indemnity and public liability when working for us.

Contractors and consultants should have their own plant and motor vehicle third party liability insurance where applicable. School-led construction contracts have specific requirements that contractors must meet.

Professional indemnity insurance

Professional indemnity insurance provides cover for financial loss as a result of negligence, errors or omissions by a contractor or consultant providing professional services.

We require all contractors and consultants working on a school project to hold professional indemnity insurance.

What professional indemnity insurance covers

A professional indemnity insurance policy will cover the:

• service provider’s legal costs and
• cost of a claim for compensation that the service provider is legally liable to pay.

Levels of insurance needed

The default levels of professional indemnity insurance in the school-led consultant agreements are:

• Short Form Agreement (SFA) – $500,000.
• Form of Agreement for Engagement of Consultant (CCCS) - $2,000,000.

Contractors with design responsibility, such as engineers and architects, must hold insurance that covers liability for the design services they are providing.

For construction contracts, the level of cover needed will be indicated in the contract:

• The template school-led Medium Works Contract requires $1,000,000 of professional insurance where a contractor is providing design services.
• The template school-led Major Works Contract includes guidance in Schedule 1 on the appropriate level of cover.

The above coverage levels are the default minimums. Higher insurance coverage might be needed if there are project-specific risks.

Public liability insurance

Public liability insurance provides cover for financial loss if a contractor or consultant is found liable for:

• loss or damage to another party’s property or
• illness or injury to another party (where the loss is not covered by the Accident Compensation Corporation).

We require all contractors and consultants working on a school project to hold public liability insurance. It is the contractor's responsibility to arrange cover.

Levels of insurance needed

The default levels of public liability insurance in the school-led consultant agreements are as follows:

• SFA – $2,000,000.
• CCCS – $5,000,000.

The default levels of public liability insurance in the school-led construction contract templates are:

• Minor Works Contract – $1,000,000.
• Medium Works Contract – $2,000,000.
• Major Works Contract – $5,000,000.

The above coverage levels are the default minimums. Higher insurance coverage might be needed if there are project-specific risks.

Public liability insurance must be renewed if the project goes over 12 months.