Common Exclusions in Construction & Engineering Insurance

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What construction and engineering insurance policies typically don’t cover

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Understanding exclusions is critical to avoiding uninsured losses

  • Allianz
  • Aviva
  • QBE
  • RSA
  • Zurich
  • NIG

COMMONLY EXCLUDED CONSTRUCTION RISKS

Why Exclusions Matter

Many construction insurance claims fail not because there is no insurance, but because the loss falls within a policy exclusion. Understanding what is not covered is as important as knowing what is.

Typical Exclusions in Construction & Engineering Insurance

While wording varies by insurer and policy type, the following exclusions are common.


  • Defective workmanship, materials or design (resulting damage may be covered)
  • Wear and tear, gradual deterioration or corrosion
  • Known defects or pre-existing damage
  • Rectification or redoing of faulty work
  • Contractual penalties, liquidated damages or delay fines
  • Intentional acts or gross negligence

Policy-Specific Exclusions to Be Aware Of


  • Contractors’ All Risk – normal settlement, testing failures beyond scope
  • Public Liability – professional advice or design errors
  • Professional Indemnity – physical damage or injury
  • Plant Insurance – mechanical breakdown unless specifically included
  • Environmental Risks – pollution unless extension is added

Why Reviewing Exclusions with Insure24 Matters


  • Policy wordings reviewed against your activities
  • Advice on extensions and buy-back options
  • Alignment with contract and lender requirements
  • Reduced risk of uninsured claims
  • Clear explanation in plain English

FREQUENTLY ASKED QUESTIONS

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Are all construction insurance exclusions the same?

No. Exclusions vary by insurer, policy type and wording. Always review exclusions carefully rather than assuming cover applies.

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Can exclusions be reduced or removed?

Some exclusions can be modified through extensions, endorsements or buy-back clauses, depending on the insurer and risk profile.

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Is defective workmanship ever covered?

The cost of rectifying faulty work is usually excluded, but resulting damage caused by the defect may be covered, subject to policy terms.

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