The excitement of making a dream home out of your flat, upgrading your store to modern standards or prepping up your business for the digital age can often overtake any thoughts being given to insurance.
Even the most ordinary accident can lead to prohibitive costs by damaging your contract materials such as decoration materials, flooring, wallpaper, sanitary ware and so forth, impacting the value of your property and triggering compensation claims from third parties such as your neighbours, which could hurt your budget. To avoid extra financial burden, getting the right insurance before construction starts is vital.
AXA’s Contractors “All Risks” Insurance is a flexible and simple insurance designed to give comprehensive coverage for property owners or tenants involved in renovation projects. Generally, the insurance covers damage to contract material at the construction site and liability to third parties for maximum protection, it also comes with the option to cover liability to third parties alone.
Product Features
Major Exclusions
- War risk, terrorism, sanctioned countries, asbestos and so forth
- Any renovation works that started before insurance
- Liability arising out of or in connection with erection and/or dismantling of scaffolding
For details of all exclusions, please refer to the Policy.
Additional Protection
Case Sharing
Case 1
An extensive interior renovation project was carried out in an apartment in a well-known large-scale residential complex. The project was covered by our Contractors “All Risks” Insurance, which came into effect before work commenced.
| • Contract Sum | HKD300,000 (no scaffolding work involved) |
| • Sum Insured for Liability to Third Parties | HKD10,000,000 |
| • Premiums paid | HKD1,650 (covers both Section 1 and Section 2) |
| • Compensation paid | HKD300,000 |
During the contract period, the floor collapsed as the fittings of the bathroom was being demolished, causing damage to several electrical appliances and the sanitary ware of the downstairs unit (that is, the third party). The costs associated with this accident included reconstructing the floor between the two bathrooms, repairing the bathroom and replacing the electrical appliances of the downstairs unit. Other claims included the hotel expenses incurred by the residents of the downstairs unit which became uninhabitable due to the accident, and various items such as the inspection service fees of the Buildings Department. Overall, the compensation reached approximately HKD300,000.
Case 2
In preparation for moving in, an entire house was renovated, including the replacement of water pipes. The project was covered by our Contractors “All Risks” Insurance bought before renovation started.
| • Contract Sum | HK400,000 (no scaffolding work involved) |
| • Sum Insured for Liability to Third Parties | HKD20,000,000 |
| • Premiums paid | HKD2,000 (covers both Section 1 and Section 2) |
| • Compensation paid | AXA defended on behalf of our insured and paid all legal expenses. |
After coordinating with the building management office and shutting down the water’s main switch, the contractor installed new water pipes inside the insured unit and then notified the management office to re-connect the water. Everything was fine for a few days until the management office alerted the owner (our insured) that the water pipe connected to his unit had burst, releasing a large amount of fresh water. Flooding the corridor, the water flowed into the elevator pit and damaged 3 elevators. This accident resulted into a claim of approximately HKD500,000 against our insured by the Owner’s Occupation.
Upon receiving the claim from our insured, AXA’s Claims Department immediately commissioned a surveyor to investigate. The investigation showed that the section of the water pipe that burst was located outside the insured unit. Since the contractor only replaced the pipe located inside the insured unit, the accident cannot be attributed to the negligence of our insured or his contractor and that they should not be liable for any loss from this accident. AXA defended on behalf of our insured and paid all legal expenses.
Frequently Asked Questions
1. To take out a Contractors “All Risks” Insurance, should the property owner or the contractor submit the application? Does it matter?
Either the property owner/tenant or the contractor can be the applicant and both parties will be insured persons under the policy, there is no difference in terms of the protection and the required premium. Nevertheless, it is important to clearly specify on the policy who the principal (the property owner/tenant) is and who the contractor is.
2. My contractor will outsource some of the work to another company. Do I need to add this sub-contractor to my policy?
No, it is not necessary. Given it is common that renovation projects involve outsourcing, our policy will automatically extend to cover all subcontractors hired by the contractor stated in the policy schedule.
3.Can I only get cover for liabilities to third parties?
Yes, but it’s not the best option since it would not cover your contract materials or properties under construction. Given that the difference in premiums between a comprehensive policy and one that cover only liability to third parties is marginal , it’s more advantageous to get the full protection.
4. How do I know whether my protection for liability to third parties is sufficient?
Given the current high property cost and large amount of court awards for bodily injury or death, insurance coverage for liability to third parties generally ranges between HKD10,000,000 to HKD20,000,000. Please note that the property management company where your renovation work is located at may also set a requirement on the sum insured for liability to third parties.
5. My renovation project involves working on scaffolding. Am I insured?
If your renovation project requires the use of scaffolding (commonly known as stepping on the scaffolding in the industry), such as replacing aluminium windows or installing air conditioner, you may apply for additional protection. Please inform us when requesting a quotation and note that the cost of scaffolding work cannot exceed 20% of the total contract sum. In addition, the erection, modification or dismantling of scaffolding is excluded by our policy, scaffolder will arrange insurance at their own.
6. What is the longest contract period covered? What should I do in case of project delays?
The contract period will be printed on the policy schedule as the period of insurance. Should there be a delay, you simply need to notify us and we will issue an endorsement if we agree to the change. Please note that such change may require additional premium. The contract period can last up to 12 months.
In addition, our policy comes with a maintenance period of three months following the completion of the project. Defects works carried out by your contractor during the maintenance period is also be covered for your peace of mind.
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Disclaimer
Information on this webpage is for reference only, and not intended to be a complete description of the applicable terms and conditions. Please refer the Policy to understand the terms and conditions of all the benefits and exclusions.
Product Features
Major Exclusions
- War risk, terrorism, sanctioned countries, asbestos and so forth
- Any renovation works that started before insurance
- Liability arising out of or in connection with erection and/or dismantling of scaffolding
For details of all exclusions, please refer to the Policy.
Additional Protection
Case Sharing
Case 1
An extensive interior renovation project was carried out in an apartment in a well-known large-scale residential complex. The project was covered by our Contractors “All Risks” Insurance, which came into effect before work commenced.
| • Contract Sum | HKD300,000 (no scaffolding work involved) |
| • Sum Insured for Liability to Third Parties | HKD10,000,000 |
| • Premiums paid | HKD1,650 (covers both Section 1 and Section 2) |
| • Compensation paid | HKD300,000 |
During the contract period, the floor collapsed as the fittings of the bathroom was being demolished, causing damage to several electrical appliances and the sanitary ware of the downstairs unit (that is, the third party). The costs associated with this accident included reconstructing the floor between the two bathrooms, repairing the bathroom and replacing the electrical appliances of the downstairs unit. Other claims included the hotel expenses incurred by the residents of the downstairs unit which became uninhabitable due to the accident, and various items such as the inspection service fees of the Buildings Department. Overall, the compensation reached approximately HKD300,000.
Case 2
In preparation for moving in, an entire house was renovated, including the replacement of water pipes. The project was covered by our Contractors “All Risks” Insurance bought before renovation started.
| • Contract Sum | HK400,000 (no scaffolding work involved) |
| • Sum Insured for Liability to Third Parties | HKD20,000,000 |
| • Premiums paid | HKD2,000 (covers both Section 1 and Section 2) |
| • Compensation paid | AXA defended on behalf of our insured and paid all legal expenses. |
After coordinating with the building management office and shutting down the water’s main switch, the contractor installed new water pipes inside the insured unit and then notified the management office to re-connect the water. Everything was fine for a few days until the management office alerted the owner (our insured) that the water pipe connected to his unit had burst, releasing a large amount of fresh water. Flooding the corridor, the water flowed into the elevator pit and damaged 3 elevators. This accident resulted into a claim of approximately HKD500,000 against our insured by the Owner’s Occupation.
Upon receiving the claim from our insured, AXA’s Claims Department immediately commissioned a surveyor to investigate. The investigation showed that the section of the water pipe that burst was located outside the insured unit. Since the contractor only replaced the pipe located inside the insured unit, the accident cannot be attributed to the negligence of our insured or his contractor and that they should not be liable for any loss from this accident. AXA defended on behalf of our insured and paid all legal expenses.
Frequently Asked Questions
1. To take out a Contractors “All Risks” Insurance, should the property owner or the contractor submit the application? Does it matter?
Either the property owner/tenant or the contractor can be the applicant and both parties will be insured persons under the policy, there is no difference in terms of the protection and the required premium. Nevertheless, it is important to clearly specify on the policy who the principal (the property owner/tenant) is and who the contractor is.
2. My contractor will outsource some of the work to another company. Do I need to add this sub-contractor to my policy?
No, it is not necessary. Given it is common that renovation projects involve outsourcing, our policy will automatically extend to cover all subcontractors hired by the contractor stated in the policy schedule.
3.Can I only get cover for liabilities to third parties?
Yes, but it’s not the best option since it would not cover your contract materials or properties under construction. Given that the difference in premiums between a comprehensive policy and one that cover only liability to third parties is marginal , it’s more advantageous to get the full protection.
4. How do I know whether my protection for liability to third parties is sufficient?
Given the current high property cost and large amount of court awards for bodily injury or death, insurance coverage for liability to third parties generally ranges between HKD10,000,000 to HKD20,000,000. Please note that the property management company where your renovation work is located at may also set a requirement on the sum insured for liability to third parties.
5. My renovation project involves working on scaffolding. Am I insured?
If your renovation project requires the use of scaffolding (commonly known as stepping on the scaffolding in the industry), such as replacing aluminium windows or installing air conditioner, you may apply for additional protection. Please inform us when requesting a quotation and note that the cost of scaffolding work cannot exceed 20% of the total contract sum. In addition, the erection, modification or dismantling of scaffolding is excluded by our policy, scaffolder will arrange insurance at their own.
6. What is the longest contract period covered? What should I do in case of project delays?
The contract period will be printed on the policy schedule as the period of insurance. Should there be a delay, you simply need to notify us and we will issue an endorsement if we agree to the change. Please note that such change may require additional premium. The contract period can last up to 12 months.
In addition, our policy comes with a maintenance period of three months following the completion of the project. Defects works carried out by your contractor during the maintenance period is also be covered for your peace of mind.
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