Contract works insurance for school property projects

NZSPA has a pre-negotiated contract works insurance policy to cover accidental loss and damage to the contract works during construction. Note that this policy does not cover damage to existing school buildings, or to the contractor's plant or equipment.

School-led projects must use NZSPA’s contract works insurance facility if the project:

• uses funding from NZSPA, or
• involves a building or other asset that is, or will be, owned or partly owned by the Crown.

If neither of the above apply, schools can elect to use NZSPA’s contract works insurance facility or can choose to insure the contract works under an alternative policy.

School building insurance funding programme

Every project needs to have an insurance certificate confirming that the contract works insurance is in place. If you’re using NZSPA’s contract works insurance facility, a copy of the certificate can be obtained through the Marsh Portal – Marsh is NZSPA’s insurance broker.

When your project has been entered into the Marsh Portal, you’ll automatically get an insurance certificate by email. Every insurance certificate has an identification number that’s unique to the relevant contract.

To get contract works insurance for your project and an insurance certificate, you need to enter the project information into the Marsh portal.

It’s important that:

• you fill out your construction contract correctly, as that can change what is, and is not, required to be covered under the contract works insurance, and
• the correct information is entered into the Marsh portal.

Ministry of Education contract works facility – Marshopen_in_new

NZSPA’s contract works insurance has pre-negotiated terms. Contracts that meet the following criteria are eligible for the standard insurance rate:

• a contract value up to $30 million
• a construction period less than 36 months, and
• a defects liability period up to 12 months.

Marsh will need more information about the project if:

• it involves tunnels, work in water, or work below the high tide mark
• the contract is valued at over $30 million
• the construction period will last longer than 36 months, or
• the defects liability period is over 12 months.

Marsh will contact you to request any extra information that’s needed. Once they’ve received the relevant information, Marsh and the insurers will review it.

If your application is accepted, Marsh will email you an insurance certificate.

The contract works insurance coverage must be kept up-to-date. If there are delays in the project, contact Marsh so they can extend the existing policy – do not re-enter the project in the Marsh portal.

If an incident causes damage to the contract works, contact Marsh immediately at moe_cws@marsh.com. You should contact your school's property advisor to let them know about it too.

Work can continue after an incident. Keep records of the incident by:

• taking photographs of the damage
• keeping damaged property, and
• keeping a record of the costs incurred to fix the damage.

Deductibles apply when a claim is made. The deductibles under NZSPA’s contract works insurance facility are:

• contract value less than $15m – deductible of $5,000 or $25,000 for loss arising from testing and commissioning
• contract value between $15m and $30m – deductible of $10,000 or $25,000 for loss arising from testing and commissioning
• contract value greater than $30m – project specific deductibles to be confirmed by Marsh.

The school board, as 'principal' under the construction contract, is liable to pay the deductible except where the loss, damage, or liability arises out of an act or omission of the contractor – in which case the contractor is liable for the deductible.