This policy may be purchased by the person who is the owner and is building (the Principal) or the Contractor who has been hired to build. The policy is designed specifically for buildings during the course of construction. A Contractor may purchase a policy for a specific job/contract or an annual policy is available that would cover various contract sites. The policy has three sections, Material Damage (property), Public Liability and Equipment.

Under the Material Damage section, the policy covers loss or damage to the property caused by one or more of the perils insured. The value or sum insured under this section usually reflects the ‘contract value’ or the replacement cost of the property at completion.

The policy can be extened to cover Contractor Plant and Equipment while used or stored at the contract site.