What each arrangement means
- Project-specific
- A policy written for a single contract. The period of insurance follows the contract programme, and the sum insured is the contract value. It can be tailored to that contract’s requirements.
- Annual
- A policy that runs for a year, usually for contractors who work on a number of contracts or on small and short jobs. Insurers often ask for an estimate of annual work and may require declarations of contract values.
- Combination
- A contractor may hold an annual liability policy and arrange a project-specific contract works policy for large contracts.
The terms insurers use and the structures they offer vary. These descriptions are general and availability depends on the insurer and your business.
How they compare
| Point | Annual | Project-specific |
|---|---|---|
| Best suited to | Several smaller or shorter contracts across a year | A single large, long or unusual contract |
| Period of insurance | A year, renewed | Follows the contract programme |
| Sum insured | Often based on estimated annual contract value, with declarations | The value of the specific contract |
| Tailoring to the contract | More generic. May need endorsements for specific contract requirements | Can be arranged around the contract’s wording and limits |
| Administration | Declarations, and updates when work changes | Set-up for each project |
| Extension if the programme overruns | Policy continues to renew, subject to terms | Period needs to be extended, and the insurer may charge for it |
| Employer’s acceptance | May need to be shown to meet the contract requirements | Usually easier to align with what the employer asked for |
General guide only. Insurer offerings differ.
When each may suit
- Annual may be worth discussing if you carry out many small jobs, have a steady flow of work and want continuity, and your contracts do not demand tailored wording.
- Project-specific may be worth discussing if a contract is large, long or complex, if the employer prescribes detailed requirements, or if the work is outside your usual activities.
- A combination may suit if you want annual liability and plant cover and project-specific contract works cover for major contracts.
A contract’s insurance clauses can also decide the matter. Some require the policy to be specific to the project, to name particular insureds or to hold a stated limit for the project alone. See insurance after winning a tender.
Questions to ask before you choose
Discuss with a broker
- Will the policy meet the contract’s limits, excesses and wording?
- How are contract values declared and how are variations handled?
- What happens if a project overruns the policy period?
- Is cover for the defects liability period available?
- Can the employer or main contractor be named as an insured?
- Does the annual limit apply to all projects together, or to each project separately?
- How do claims on one project affect the terms on others?
Cost is not the only measure
Annual arrangements can look cheaper per project but may include a shared limit, wider conditions or exclusions that do not suit a particular contract. Project-specific arrangements can look more expensive but fit the contract better. Compare the cost against what the contract requires and what each policy would respond to. What affects the cost of Contractors All Risk insurance explains how insurers price.
Common questions
Can I switch from annual to project-specific cover mid-year?
That depends on the insurer and the policy terms. Raise it with us before the project starts, because a large new contract may not fit within an existing annual arrangement.
Does an annual policy automatically cover every project I take on?
Not necessarily. It may depend on contract size limits, declarations and the types of work you declared. Check the policy against each significant contract.
Which is better for a subcontractor?
It depends on whether the main contractor includes subcontractors in its policy and what the subcontract requires. See insurance for subcontractors.
What happens to an annual policy if I have a claim?
The effect on renewal terms depends on the insurer and the claim. Ask how claims on one project could affect your cover and premium for others.
Not sure which structure suits you?
Tell us about the number and size of your projects, and send any contract insurance requirements. We will discuss the options with you.
Get a QuoteAn enquiry does not put cover in place. Cover is subject to underwriting and policy terms.
Related reading
- Contractors All RiskCover for the works under construction, such as roadworks, drainage, pipelines and structures, subject to policy terms.
- Public liabilityCover aimed at your legal liability to third parties for injury and property damage arising from your work.
- What affects the cost of Contractors All Risk insuranceWhat affects Contractors All Risk pricing: contract value, type of work, duration, location, excess and claims history. We publish no premium rates.
- Contractors All Risk vs public liabilityThe difference between Contractors All Risk and public liability insurance: first-party damage to the works versus third-party liability, and how the two may overlap.