Does Public Liability cover contractual penalties or liquidated damages?

No. Public Liability covers injury or property damage resulting from your operations, not pure financial loss. Contractual penalties or LDs usually require separate project delay or DSU insurance.

Common Exclusions & What Construction Insurance Doesn’t Cover

Name: Construction Insurance – Common Exclusions
Brand: Insure24
Availability: InStock

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Understand the key exclusions, limitations and conditions that apply to construction policies - so you’re not caught out when making a claim.

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WHAT YOUR CONSTRUCTION POLICY MAY NOT COVER

Avoid surprises by knowing what your policy excludes

Construction insurance provides vital protection, but all policies contain exclusions, restrictions and conditions that may affect your cover. Understanding these helps you avoid gaps and ensure compliance with insurer requirements.

Typical Construction Policy Exclusions

Common exclusions found across Contractors’ All Risks, Public Liability and Employers’ Liability policies.

Defective workmanship, design or specification (unless specific cover is purchased)
Wear and tear, gradual damage or poor maintenance
Damage to existing structures unless specifically included
Losses caused by non-compliance with conditions or warranties
Damage due to faulty materials or incorrect installation
Penalties, fines or contractual liabilities not arising from insured damage
Electrical or mechanical breakdown of plant (unless plant cover is added)
Losses outside the territorial limits or work outside the allowed height/depth limits

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Conditions & Warranties That Commonly Affect Cover

Common Policy Conditions

Minimum site-security requirements (fencing, CCTV, locked containers)
Hot-works permits and fire-watch procedures
Storage conditions for flammables or hazardous materials
Weather precautions such as sheeting and water diversion
Disclosure of major project changes or contract variations
Accurate declarations of wage roll, turnover and subcontractor usage

How These Affect Claims

Failure to comply can void or reduce a claim
Incorrect risk information can invalidate a policy
Unnotified changes can breach terms and conditions
Claims may be declined where precautions were not taken
Certain works might fall outside height/depth/usage limits

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Why Understanding Exclusions Matters - and Why Insure24 Helps

We explain exactly what your policy includes - and excludes
Clear guidance on warranties, security requirements and compliance
Help structuring wider programmes to avoid cover gaps
Advice on specialist extensions such as existing structures or design cover
Support in choosing the right insurer for your project risk profile
Claims support if the unexpected happens on site

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“Insure24 helped us understand the exclusions on our CAR and Liability policies. It meant we could put additional cover in place and avoid a serious gap in protection.”

Construction Contractor, UK

FREQUENTLY ASKED QUESTIONS

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Does construction insurance cover defective workmanship?

Usually not. Most policies exclude rectifying faulty workmanship or materials, although resulting damage may be covered. Specialist “defects” cover can sometimes be added.

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Are existing structures covered automatically?

No - existing structures are normally excluded unless the policy specifically includes them. This is important for refurbishments, conversions and extension work.

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What happens if we don’t meet a policy warranty?

A breach of warranty can allow the insurer to reject a claim - even if the breach is unrelated. Insure24 ensures you understand every warranty and how to comply.

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Does Public Liability cover contractual penalties or LDs?

No. Public Liability covers injury and property damage - not pure financial loss. LDs and penalties generally require specialised project delay or DSU insurance.

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Is wear and tear or gradual deterioration covered?

No. Insurance responds to sudden, unforeseen events - not deterioration over time. Maintenance issues are excluded from nearly all construction policies.

Related Covers

Exclusions pages are strongest when they route users into the policy sections, extensions and project risks that usually create coverage gaps. These links keep wording-focused construction visitors on related pages.