TOOLS TO COVER YOUR ARSE

THE TOOLS TO COVER IT

YOUR STUFF

YOUR LIABILITY

Errors & Omissions Statutory Liability Employers Liability

YOUR MONEY

Trade Payment Guarantee Retention Bonds

YOUR FAMILY

Income Protection, ACC Life, Trauma

ABOUT CBA INSURANCES

Work exclusively in the construction sector

More than 100 years combined insurance

experience

Tailored policies

Focus on the best possible cover, at the best

possible price

CONTRACT WORKS INSURANCE

– also known as

Covers damage to the building being built – new or additions – for things like Fire, Storm, Water damage, Theft, Earthquake,

Subsidence, Tsunami…

All sorts of Extensions are available and need to be included – Materials supplied by Owner, Demolition, Fees, Transit, Storage, Increased Costs

Alterations – covering the existing structure is a major problem!

CBANZ & most other building contracts require the builder to insure if a new build, but the Owner to do so for alterations.

They must also tell their insurer and it’s preferable for the Contract Works insurance to be with the same Insurer. Don’t be tempted to “help

Contract Works Insurance should

Start

when the

building contract is signed and before construction

starts……

but note problems of when it

Finishes,

(iii) at the time the contract works are occupied, taken over or taken into use.

 (i) at the time a CPC (Certificate of Practical Completion) is issued, or

(ii) at the time the contract works are practically complete except for minor omissions and minor defects,

or

and for a Spec,

where there is no agreement to purchase, at the time 95% of the project price has been expended on the contract works and the contract works are made available for public viewing.

a) 30 days after the time of Practical Completion of the Contract

Works; or

b) with respect to any portion of the Contract Works, 30 days

after the time it is taken over or taken into use (whichever is

the earlier) by the purchaser or principal or any person or

corporation authorised by either of them; or

c) on the expiry date shown in the Period of Insurance specified

in the Schedule; or

d) on the issuing of a Code Compliance Certificate;

We will check with you when the policy is near to expiry to make sure it’s kept current!

This is a really important thing – if the Contract Works cover hasn’t been extended, then it’s you, the builder, who may be personally liable for the

damage – better get an E&O policy too!

We generally recommend an Annual Policy to cover all projects if you build regular value structures, so you can’t forget!

This has some issues nowadays however – the limit is the limit and any contracts above that MAY NOT BE INSURED AT ALL!

If you have one though, please get your Annual Declaration back to us on time!

Be careful if you cease work for more than 90 days, as

there will be no cover after that, unless the Insurer is told

and agrees to it.

This is of particular note where ‘staged’ contracts are involved.

GST is additional to Sums Insured, so you only need to insure

GST Exclusive

As almost all contracts run over the expected build time,

add a

month or two on

, as it only costs an additional Fire Services

The ‘post loss’ covers to rebuild need to be

considered to meet contract requirements.

Demolition and Removal of Debris 10.00% Professional fees 5.00% Expediting Expenses 2.50% Increase during Construction 5.00%

Increase during reinstatement 5.00%

The CBANZ Contracts show Standard percentages as below, which can be amended.

Materials supplied by Owners

needs to be included

as a separate item, as it is not part of your contract.

HOUSE INSURANCE

Most Insurers are shifting from ‘Area Full Replacement’ to a Sum

Insured during the next 12 months.

This will require every owner to calculate the replacement cost

of their home!

There are website/computer driven calculators to help. These

take time and need the Owner to have all the required info

available.

VEHICLE INSURANCE

Market Value: Try Trademe

Trailers are deemed Motor Vehicles, not

Tools!

WHAT WE COVER

HOUSE TOOLS & EQUIPMENT

PUBLIC LIABILITY INSURANCE

Cover your liability if you

Includes:

PUBLIC LIABILITY INSURANCE

Most policies cover consequences of defective

workmanship, but

not the cost of putting faulty

workmanship right

The cost of legal fees for defending claims,

which can often be the costly part!

Doesn’t cover:

PUBLIC LIABILITY INSURANCE

Damage caused by your vehicles, including trailers

Accidental injury

Building defects, external water penetration,

gradual deterioration

Doesn’t cover:

PUBLIC LIABILITY INSURANCE

Damage caused by faulty design

Liability that you have contracted into

Loss of use

Doesn’t cover:

PUBLIC LIABILITY INSURANCE

Your faulty workmanship

Damage that results from your paid professional

advice

Your own products

CBANZ MEMBERS HAVE ACCESS TO THE BEST COVER

AVAILABLE IN THE MARKET

Your product

LBP Disciplinary Complaints

Employees and ‘deemed employees’

Paid professional advice

Faulty workmanship

Claims process & payment reputation of

underwriter

Broker expertise & relationship

OTHER THINGS TO CONSIDER WHEN LOOKING FOR

COVER

ERRORS & OMISSIONS (E&O) INDEMNITY

Cover your liability for a client’s

financial loss

Covers your legal liability from:

Your acts, errors or omissions in the provision of

building & related service activities

ERRORS & OMISSIONS (E&O) INDEMNITY

Acts, errors or omissions of your sub-contractors,

consultants & agents

Includes:

Costs & expenses

ERRORS & OMISSIONS (E&O) INDEMNITY

Court/tribunal awarded damages

STATUTORY LIABILITY INSURANCE

Cover your liability if you break

the law

For example:

STATUTORY LIABILITY INSURANCE

Doing un-consented work

LBP disciplinary complaints

For example:

STATUTORY LIABILITY INSURANCE

Breaching the Consumer Guarantees

Act

Fair Trading Act breaches

Defending Health & Safety cases (legal

costs only)

Covers:

STATUTORY LIABILITY INSURANCE

Legally allowable fines & penalties

Defence costs

Employees in NZ are covered for

workplace accidents through ACC,

however there are some exceptions

ACC does not cover emotional effects

such as stress, or injury caused over a

period of time

You are not, by law, able to insure against fines &

penalties for breaches of OSH, but defence costs can

be insured

As a result, your employees can sue you for work

related conditions that are not covered by ACC

WHAT WE COVER

HOUSE TOOLS & EQUIPMENT

TRADE PAYMENT GUARANTEE

Still get paid if your head

contractor goes bust

Pays 75% of your outstanding invoices if your head

contractor becomes insolvent

Avoid a big unpaid invoice bringing down

your business

Price in the cost when tendering, improve

profitability

Details:

Three limits:

Fixed cost

TRADE PAYMENT GUARANTEE

$25,000

$50,000

$100,000

RETENTION BONDS

Your cash is in your pocket:

Get paid in full

Margin not at risk if your head contractor

falls over

Improve your own cashflow

Your cash is in your pocket:

Fixed cost, easy to price into quotes

Can save you money if you’re running on

overdraft

Example:

Required to give retentions of $20k

6 month defects liability period before

release

10% overdraft rate

Example:

Fixed bond fee = $600

Funding retentions from your overdraft = $1,000

You save

$400

by using a bond instead

RETENTION BONDS

How:

Easy to add into your contract – “provide a bond in

lieu of retentions”

Apply for bond, pay bond premium

Bond expires when the defects period ends

RETENTION BONDS

Terms & Conditions Apply

WHAT IS YOUR MOST VALUABLE TOOL?

ACC LEVIES

Are you paying more for your

ACC levies than you should?

Will your payout be enough to

live on?

ACC LEVIES

Use an agreed value – avoid the risk of

income fluctuation affecting your

payout

ACC Cover Plus Extra could

save you

money

COME & SEE US TO FIND OUT MORE

Income protection

Disability/Trauma

Life

WHAT WE COVER

YOUR STUFF

YOUR LIABILITY

YOUR MONEY

YOURSELF

0800 237 843

[email protected]

RISK MANAGEMENT

Predictable low (relatively) cost of

insurance

CONTRACT WORKS INSURANCE

COVERS RISKS SUCH AS:

Accidental damage

Earthquake

Vandalism

Flood

Theft

Fire

BUT...

WHAT ABOUT THESE?

Losing deposit

Extra costs to complete dwelling

Non-structural defects

Structural defects

Starplus Homes (Waikato, Auckland) – Apr '13 ($14m)

CS Homes (Southland) – Nov ‘12 Mainzeal (Nationwide) – Feb ’13 ($70m)

Brookfield Multiplex Constructions (Auckland) – Dec ‘12

NZ Sleepouts and NZ Kennels (Auckland) – Aug ‘12 Hartland Construction (Queenstown) – July ‘12

Jennian Homes (Manawatu) – Apr ‘12

HUNDREDS OF CONSTRUCTION COMPANIES CEASE

TRADING EVERY YEAR

Location Homes (North) – Nov ‘12

MANY REASONS

Poor financial management

Don’t get paid for a big job

Business partners fall out

Workplace accident

Cashflow problems

Move to Australia

Not enough work

Subbie stuffs up

Serious illness

Boat accident

Car accident

BUILDERS WARRANTIES

90% of UK homes are built with an

independent 10 year warranty

They are compulsory in most Australian

states

Many NZ banks now require them as a

condition of construction lending

BUILDERS WARRANTIES

Homefirst has been going for 10 years now

More than 11,000 homes are covered by

Homefirst Guarantees in NZ

CBL Insurance has more than 1 million

homes under warranty worldwide

BUILDERS WARRANTIES

50% of homes built in NZ now come with a

third party guarantee

HOMEOWNER BENEFITS

If their builder can’t complete the job:

Their deposit is safe

Extra costs to complete their home

are covered

HOMEOWNER BENEFITS

Repairs will be organised & paid for

under the guarantee

If there are defects and their builder isn’t

around anymore:

HOMEOWNER BENEFITS

If they decide to sell within 10 years:

Great marketing tool – Peace of

mind for prospective buyers

Adds value to their home - get a

better price & a faster sale

HOMEOWNER BENEFITS

Homefirst

Master Build

Insurer’s right to cancel

Only if homeowner provided false info

If homeowner or builder provided false info

Independent

claims handling _{Yes – Builtin NZ No - Master Build Services} Licensed insurer Yes, CBL is regulated

by the Reserve Bank

No vs

BUILDER BENEFITS

Building Act Amendment No. 4 will require you

to disclose if you can offer one

Use the Homefirst Guarantee

brand to promote your business

BUILDER BENEFITS

Homeowners want an independent guarantee

You will actually win MORE jobs by

including it and highlighting it to your

clients

BUILDER BENEFITS

“Quote includes an independently insured 10

year defects & weathertightness guarantee”

Can the other builders they’re

considering offer this?

Include a copy of the brochure to explain

what it covers

BUILDER BENEFITS

Homeowners can’t use their guarantee unless

they have paid you in full first

BETTER

BIGGER

EASIER

FINANCIAL RISK

Homefirst

Master Build

Loss of Deposit

20%, max

$50,000

5%, max

$25,000

Non-Completion

20%, max

$100,000

10%, max

$40,000

BETTER

DEFECTS RISK

Homefirst

Master Build

Non-structural

50% of

contract

price,

max $1m

100% of

contract

price, max

$500,000

Structural

Weathertightness

BIGGER

TO APPLY

Send us:

1. Completed application form – signed by

you and client

2. Copy of payment schedule from contract

3. Cheque for fee (or internet bank it to us)

Attach:

Do it when you do your contract

TO APPLY

Online using your CBANZ details at:

www.builtin.co.nz/login

Using the paper application. Email:

[email protected]

DETAILS

Launches 1

_July

New application booklets and brochures:

-

[email protected]