Insurance procurement for school property projects
Insurance for school property projects includes contract works insurance, professional indemnity insurance for consultants, public liability insurance for contractors and cover for school buildings that might be damaged during the project work. Contractors have their own plant and equipment insurance. Project managers must make sure projects have appropriate insurance cover.
- Getting contract works insurance
- Professional indemnity insurance
- Public liability insurance
- Insurance for school contents during a construction project
- Contractors’ plant and equipment insurance
Contract works insurances covers accidental loss and damage to construction works. It covers damage to the works being undertaken under the contract. It doesn't cover damage to existing property or to contractor’s plant and equipment.
The Ministry provides contract works insurance at a minimal cost to the construction project at state schools.
If the project involves a building or other asset that is, or will be, owned or partly owned by the Ministry, then you must use our contract works insurance.
If the project is wholly funded by the school board and on a school site, you can choose to use our contract works insurance at no cost to you. Alternatively, the board can arrange its own insurance separately.
What's covered by the contract works insurance
Our contract works insurance automatically covers construction projects with a contract value up to $15 million, provided the construction period doesn't exceed 18 months and the defects liability period doesn't exceed 12 months.
If the construction project has a contract value of over $15 million, or a construction period exceeding 18 months, or with a defects liability exceeding 12 months, you'll need special acceptance by our insurers before it can be covered.
Keep your contract works insurance up to date. If there are any delays in your construction project, alter your cover accordingly.
Applying for contract works insurance
You must enter details of each contract into our insurance broker’s website.
Once the contract has been entered into the website you'll be emailed an insurance certificate. Each certificate issued has a unique number.
Check with the insurers if the work involves tunnels, work in water, or work below the high tide mark.
If the project needs special acceptance you’ll receive an email saying it's ‘outside guidelines’ and then an insurance certificate once it's been accepted.
In some cases a contractor will ask to be a ‘named insured’ on the contract works insurance policy. The contractor and sub-contractor are automatically included as insured parties, but won't be named specifically.
Making a contract works insurance claim
Contact the school’s property adviser if you need to make a claim under contract works insurance. This must happen as soon as possible so a loss adjuster has the opportunity to inspect the damage.
You can continue with the project but you must do everything possible to ensure adequate records are kept and to keep damaged property for inspection. Take photographs of the damage if this isn’t possible.
A ‘contractor deductible’ of $5,000 applies to all contracts, except $25,000 for loss arising from testing and commissioning.
All consultants, including project managers, must have professional indemnity insurance. This covers financial loss as a result of negligence, errors and omissions.
If a consultant is found liable, the insurance will cover them for:
- legal costs
- any damages awarded to put the problem right.
Consultants must have at least $500,000 professional indemnity insurance. Make sure this minimum amount is included in the contract special conditions.
Find out more about Ministry standard contracts.
Public liability insurance covers contractors for damage to people or property during a construction project. It doesn't cover the contract works.
It's the contractor’s responsibility to arrange public liability cover. Make sure you see their cover note for public liability insurance. This must be renewed if the project goes over 12 months.
Contractors must have public liability insurance to a minimum of:
- $1 million for projects with a value under $50,000
- $2 million for projects over $50,000.
These are minimum sums and in some cases it would be wise to have more cover depending on the building’s value.
Contractors must have separate liability insurance to cover damage to school property during a construction project (see public liability insurance above). The school should check with their insurer that the board's own contents (and own buildings if applicable) insurance is not invalidated by the contract works occurring.
Contractors should have their own plant and equipment insurance.
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