With supply chain issues causing much longer lead times for building materials, which creates further scheduling challenges, there’s a good chance that your project may be interrupted or delayed for a significant period of time.
Insurers don’t like to cover buildings that are unoccupied and the same applies to building sites that are abandoned, or where work is not progressing.
The reason is that there is a higher risk of claims and of those claims being more expensive. For example, issues such as a burst pipe or other flooding may go undetected for longer, making damage worse. Abandoned sites are also at greater risk of burglary and vandalism.
That’s why contract works insurance generally either automatically ceases after a period of stoppage, or excludes claims from events following a period where work has stopped on site.
Here are some examples of policy wording:
Stoppage of work
If work at the Contract Site effectively ceases for a period of sixty (60) consecutive days, all indemnity under this Policy shall cease at 4pm on
that sixtieth (60th) day and the indemnity shall only be reinstated if the cessation of work is disclosed to Us and only from the date and to
the extent which we subsequently advise in writing.
And another insurer’s policy states:
Losses not covered
This policy does not insure loss immediately preceded by total or partial stoppage of work for longer than 90 days.
This means if you know work is going to be delayed you should make sure your insurer is aware of this, so you’re not caught out if something does happen. They may want to impose additional terms, such as a higher excess during the period and a requirement that the site is regularly visited until work starts up again.