Practical Completion doesn’t mean the Contractor has finished the Works in every detail. It means the Works are sufficiently complete to be safely used by the Employer for the purpose he intended. The Contractor may still complete minor items and fix defects after Practical Completion, as long as the Employer isn’t inconvenienced.

Yes, damage to surrounding property is covered by a construction all risk policy, provided it’s included as an add-on to the Contract Works cover. This means an extra premium would be charged to get the specified surrounding property covered.

Dirk Gouws (Engineering Insurance expet, AC&E Engineering Underwriting Managers) explains the meaning of having your name on a Contractors All Risk policy.

When it comes to planning a new construction project, insurance doesn’t always get the priority it requires, with contractors often wondering whether it is really necessary to take out a contract works policy at all. Very often the contract works policy is arranged at the last minute, or even after the project has already started.

The Defects Liability Period starts when the Certificate of Completion is issued and continues for the period agreed to in the Contract. During the Defects Liability Period, the Contractor has to obey all written instructions from the Engineer to carry out repairs and fix any defects which appear in the Permanent Works, so that, at the end of the Defects Liability Period, the Permanent Works are in the condition required by the Contract.

The main part of the Contractors All Risks insurance is the Contract Works section which provides cover for the property being worked on (e.g. new house, etc.). But it’s important to be aware of what’s not covered by a contractors all risk policy, these are just a few examples:

Does Contractors Liability on the Contractors All Risk policy cover damages to a structure, caused by a disgruntled employee’s pre-meditated sabotage?

A Contractors All Risk insurance policy, provides cover for the contract works, surrounding property, contractors’ public liability, SASRIA, Special Risks..