What does it cost?
As an indication (bear in mind that each situation of risk is different) a $280,000 construction contract
would result in an approximate premium of $900 including GST.
Why you need construction insurance?
What Construction Insurance Covers
Fire, burglary, vandalism and accidental damage.
What Construction Insurance Does NOT Cover
Construction insurance does not cover the quality of the finish or guarantee that the contractors will
finish on time or the financial failure of the contractors. For this you need a Performance Bond.
Performance Bond
While Construction insurance covers accidental damage to the work being undertaken what happens if
you do not believe that the building has been built properly or the builder fails to complete the building?
To cover these risks you need a Performance Guarantee Bond which may also be known as a Builders
Guarantee.
One of these is available from Builtin New Zealand Ltd www.builtinnz.co.nz. and we thank them for the
information shown below. The Master Builders Federation have a similar product.
What does it cost?
As an indication (bear in mind each construction contract is different) a $280,000 building contract
would result in a premium of $1,000 including GST.
What is the Homefirst Builders Guarantee?
Builders approved by Builtin New Zealand Ltd can apply for a seven-year written guarantee when
undertaking to build a new home, or for alterations and additions to an existing home. Members of the
Certified Builders Association of New Zealand Inc are able to offer a ten-year guarantee.
This covers:
in the event of the builder's death, disappearance, insolvency, cancellation or suspension of licence, or
early termination due to wrongful failure or refusal to complete.
The Builtin New Zealand Homefirst Builders Guarantee guarantees the builder's contractual
obligations, and is only available when a Builder approved by Builtin carries out the building project,
ensuring that the building of the home will be undertaken &/or supervised by capable and financially
secure builders. The guarantee gives the homeowner additional reassurance and confidence in
ensuring the security of any deposit, and quality of the workmanship provided by their builder.
If a contract is not completed for whatever reason, Builtin New Zealand Ltd will encourage the builder to
remedy the problem and, if necessary, appoint another builder to do so, and the written guarantee will
cover or contribute significantly to the cost.
As an indication (bear in mind that each situation of risk is different) a $280,000 construction contract
would result in an approximate premium of $900 including GST.
Why you need construction insurance?
- Like completed buildings, buildings under construction can suffer from many causes of
damage including fire, burglary, vandalism and accidental damage.
- As the site is often unattended there are heightened risks of vandalism, arson and theft of
materials, fixtures and fittings. There have been several incidents where entire house loads of
materials have been stolen overnight. Complete kitchens and bathrooms have also been
stolen. A very common target of theft is the external hot water boiler (e.g. Infinity System).
- In the early stages of construction the framing is not as secure from an engineering perspective
as it will be in a completed building. Thus the risk of storm damage or collapse is much greater.
- With so many people working on site together damage to already completed sections is a real
risk.
- If the contract involves renovations to an existing property, the current insurer of the
building might not continue cover during the period of increased risk of loss or
damage. It will therefore be necessary to insure the work being undertaken plus the existing
building. Note: if you are contemplating renovations it is prudent to check with your insurer
whether this is going to impact on your current insurance policy.
What Construction Insurance Covers
Fire, burglary, vandalism and accidental damage.
What Construction Insurance Does NOT Cover
Construction insurance does not cover the quality of the finish or guarantee that the contractors will
finish on time or the financial failure of the contractors. For this you need a Performance Bond.
Performance Bond
While Construction insurance covers accidental damage to the work being undertaken what happens if
you do not believe that the building has been built properly or the builder fails to complete the building?
To cover these risks you need a Performance Guarantee Bond which may also be known as a Builders
Guarantee.
One of these is available from Builtin New Zealand Ltd www.builtinnz.co.nz. and we thank them for the
information shown below. The Master Builders Federation have a similar product.
What does it cost?
As an indication (bear in mind each construction contract is different) a $280,000 building contract
would result in a premium of $1,000 including GST.
What is the Homefirst Builders Guarantee?
Builders approved by Builtin New Zealand Ltd can apply for a seven-year written guarantee when
undertaking to build a new home, or for alterations and additions to an existing home. Members of the
Certified Builders Association of New Zealand Inc are able to offer a ten-year guarantee.
This covers:
- Loss of Deposit
- Non-Completion of the dwelling
- Structural Defects for 7 (or 10) Years
- Non-Structural Defects for 2 Years
- Alternative Accommodation
in the event of the builder's death, disappearance, insolvency, cancellation or suspension of licence, or
early termination due to wrongful failure or refusal to complete.
The Builtin New Zealand Homefirst Builders Guarantee guarantees the builder's contractual
obligations, and is only available when a Builder approved by Builtin carries out the building project,
ensuring that the building of the home will be undertaken &/or supervised by capable and financially
secure builders. The guarantee gives the homeowner additional reassurance and confidence in
ensuring the security of any deposit, and quality of the workmanship provided by their builder.
If a contract is not completed for whatever reason, Builtin New Zealand Ltd will encourage the builder to
remedy the problem and, if necessary, appoint another builder to do so, and the written guarantee will
cover or contribute significantly to the cost.
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| Construction Insurance |
 |  |  |  |  |
Innovation + Experience |
| PO BOX 9018, Wellington 6141 | phone: (04) 240-0124 | fax: (04) 232-4414 | email: valuer@ vcnz.co.nz Innovation + Experience |