Reviewed by licensed advisers at Smiths Insurance & KiwiSaver (FSP712931) · Updated 11 November 2026

Builders Insurance NZ: Covers for Residential Builders and Building Companies

Builders insurance in New Zealand is a set of separate covers, not one policy. The ones builders and building companies most often ask about are contract works (the build itself until handover), public liability, tools and plant, business vehicles and statutory liability. Which party insures the build is set by the building contract, and clients and main contractors often ask for a certificate of currency before work starts.

In short

What builders get asked to show

  • A certificate of currency before you are on site
  • A public liability limit set in the subcontract
  • Who insures the works until handover, in writing
  • Proof your subcontractors carry their own cover

The build before handover

Storm, theft or fire hits a part-built house.

The 10-year tail

Civil claims about building work can be brought up to 10 years later.

Subbies without cover

If a subcontractor has no public liability, a claim can land with you.

Trailer and shed theft

Tools and small plant leave site overnight in someone else's hands.

Work out what to raise

Tick what applies to you

  • We build new houses

    A part-built house is exposed to storm, theft and fire before handover.

    Covers to raise: Contract works, Public liability

  • We do renovations or extensions

    Work on an existing home can damage the parts that were already there.

    Covers to raise: Contract works, Public liability

  • We take commercial or larger contracts

    These contracts often name a liability limit and who insures the works.

    Covers to raise: Public liability, Contract works, Statutory liability

  • We use subcontractors

    Ask how a subbie with no cover of their own is treated.

    Covers to raise: Public liability, Statutory liability

  • We employ builders or apprentices

    Employers carry duties under the Health and Safety at Work Act 2015.

    Covers to raise: Statutory liability

  • We design, specify or project manage

    Advice and design work can sit outside public liability.

    Covers to raise: Professional indemnity

  • Tools and small plant go back to a shed or trailer

    Storage conditions can affect whether theft is covered.

    Covers to raise: Tools and equipment

  • A ute or truck carries our gear and materials

    Covers to raise: Business vehicles

What these covers do not pay

  • Redoing or fixing your own faulty work.
  • Wear and tear, or damage that happens slowly over time.
  • Your own tools and plant under public liability. That is a separate cover.
  • Health and safety fines, which can never be insured (Health and Safety at Work Act 2015, s 29).
  • Work outside the trade description or licence class on the policy.

General information only. Whether a cover responds depends on the policy wording.

Which clause is in your contract?

  • Who insures the works

    The contract says who arranges insurance for the job while it is being built: the client, the head contractor or you. It also shows who holds the risk until handover.

    Covers to raise: Contract works, Public liability

    What it does not decide: It does not decide whether the policy that exists covers your part, your materials, or your subcontractors. Check who is insured under it and what it leaves out.

  • Subcontractor cover

    The contract asks that anyone you sub the work to carries their own insurance, or that your policy responds to their work. Insurers often ask how much work you sub out and whether you check your subbies.

    Covers to raise: Public liability, Contract works, Statutory liability

    What it does not decide: It does not decide whether your policy covers a subcontractor, or whether theirs is enough. Both depend on the wordings and on what you declared.

  • Workmanship warranty

    You promise to put right defective work for a set period after completion. On residential building work, the Building Act 2004 also implies warranties that sit alongside the contract.

    Covers to raise: Public liability, Professional indemnity, Contract works

    What it does not decide: It does not decide whether insurance pays to redo your own faulty work. Public liability generally responds to resulting damage to others, not the cost of fixing the work itself.

General information, not legal advice. The full clause and the policy wording decide how it applies.

Check your certificate of currency against the contract

Clients and main contractors in this trade ask for:

  • A certificate of currency before you are on site.
  • A liability limit and who insures the works, set out in the contract.
  • Proof that subcontractors carry their own cover.

Check the insured name, limit and dates match the contract. The policy wording, not the certificate, decides what is covered. How a certificate of currency works

What each cover may pay, and what it usually does not

  • Contract works

    May respond to
    Damage to the part-built job and materials on site until handover.
    Common trigger
    Storm, theft, fire or vandalism before the client takes over.
    Usually not covered
    The cost of redoing faulty workmanship.

  • Public liability

    May respond to
    Injury or damage your work causes to other people or their property.
    Common trigger
    A digger hits a fence, or water damages a finished room.
    Usually not covered
    Your own tools, and the fix to your own work.

  • Tools and equipment

    May respond to
    Theft of or damage to tools, small plant and scaffolding.
    Common trigger
    A break-in at the shed, trailer or ute.
    Usually not covered
    Wear and tear, and losses that break the storage conditions.

  • Business vehicles

    May respond to
    The ute or truck, and damage it causes on the road.
    Common trigger
    A crash on the way to site.
    Usually not covered
    Tools and materials inside, unless the policy says so.

  • Statutory liability

    May respond to
    Defence costs if a regulator investigates or prosecutes.
    Common trigger
    A WorkSafe investigation after a site incident.
    Usually not covered
    Health and safety fines, which can never be insured.

  • Professional indemnity

    May respond to
    A client claiming your design, advice or project management cost them money.
    Common trigger
    A design-and-build job where the plans prove wrong.
    Usually not covered
    Physical damage, which belongs under public liability.

If something goes wrong

  • A storm hits a part-built house

    Wind lifts wrap and framing on a house two weeks from lock-up, and rain gets into new gib and flooring.

    May respond: Contract works

    Have ready

    • The signed contract showing who insures the works
    • Dated photos of the site and damage
    • The materials list and supplier invoices

  • A digger damages a neighbour's fence

    A digger swings through a boundary fence and clips a parked car on the other side.

    May respond: Public liability

    Have ready

    • Photos of the fence and car
    • The neighbour's contact details and any quote
    • Your certificate of currency

  • A subbie's leak ruins a finished room

    A subcontractor's mistake causes water damage to a finished room, and the subbie has no cover of their own.

    May respond: Public liability

    Have ready

    • The subcontract and the subbie's certificate, if any
    • Photos and a moisture report
    • The job diary or site notes

  • A claim turns up years later

    Years after handover, water gets in at a detail you built and damages the client's finished interior.

    May respond: Public liability

    Have ready

    • The dated written contract
    • Plans, specifications and consent records
    • Your policy wording, to see how late claims are treated

Typical examples, not real claims. ACC deals with most injuries, so an injury claim is mostly about property and legal costs. Whether a claim is paid depends on the policy wording and the facts.

Licence versus insurance

A licence is not insurance.

What the licence or register says

  • Licenses people to carry out or supervise restricted building work.
  • Does not make a policy a condition of an LBP licence (checked 11 November 2026).

Source: Licensed Building Practitioners scheme

Why builders are different

A sparky or a painter usually finishes a visit and leaves. A builder leaves something behind that people live in for decades. The build is exposed on site for months to weather, theft and fire. The work is often hidden under cladding, so a fault can surface long after handover. And the client is usually a household buying the largest asset of their life.

Sole trader starting out? Our tradie insurance page covers the general package. This page is about what changes when you build.

The covers builders ask about

Cover The question it answers Where it matters most
Contract works Who pays if the build is damaged or stolen before handover? New builds, extensions, larger renovations
Public liability Who pays if my work injures someone or damages their property? Every job, and usually a contract condition
Tools and plant What if the trailer or site shed is emptied overnight? Own tools, scaffolding or small plant
Business vehicle What if the ute or truck is written off? Anyone carrying tools and materials to site
Statutory liability Who covers defence costs if a regulator investigates? Companies with staff or subcontractors
Professional indemnity What if advice or design I gave turns out to be wrong? Design-and-build, specification work

A one-person renovator is in a different position from a company running several sites. For subcontract trades see carpenter insurance and roofer insurance.

Contract works: the build itself

Contract works cover, sometimes called builders risk, insures work in progress against accidental loss or damage: a storm that takes off part of a roof, theft of materials, fire before handover. Our contract works guide covers what is usually in and out.

The contract decides who buys it, and on residential work it is often the builder. If the owner's house policy is meant to respond during a renovation, confirm that in writing with their insurer before you start. For the commercial form see NZS 3910 insurance requirements, and for the homeowner's side insurance when building or renovating.

Policies commonly limit faulty design or workmanship, wear and tear, and gradual loss. Read those clauses before you sign.

Public liability and the certificate

Public liability pays when your work causes injury or damage to someone else: the neighbour's fence hit by a digger, or water damage to a finished room caused by a subbie's mistake. Because ACC pays for most personal injury (Accident Compensation Act 2001, s 317), building claims skew toward property damage.

Main contractors and developers often set a minimum limit and ask for a certificate of currency before you are on site. The limit asked for can decide whether you can bid.

The long tail after handover

Under the Building Act 2004, s 393, civil proceedings about building work can be brought up to 10 years from the act or omission they are based on. For household units the Act also implies warranties into the contract, including proper and competent work with reasonable care and skill (s 362I). A client may give notice of fixable defects within 12 months of completion (s 362Q).

What this means for insurance:

No policy makes the 10-year exposure go away. For residential contracts priced at $30,000 or more including GST (regulation 4), s 362F requires a written, dated contract. That contract also shows who was meant to insure the works, and it is the first document anyone asks for when a claim arrives years later.

Licensing and insurance are different things

Licensed Building Practitioners are licensed to carry out or supervise restricted building work (LBP scheme). Licensing decides who may do the work. Insurance decides who pays if it goes wrong. The Act does not make a policy a condition of an LBP licence, but insurers may ask about your licence class.

Staff, subcontractors and tools

WorkSafe says construction employs about 10% of New Zealand workers and accounts for about 15% of work-related fatalities and serious injuries. Statutory liability can respond to defence costs when a regulator prosecutes, but never to a Health and Safety at Work Act fine: section 29 makes cover for those fines of no effect. See the statutory liability page.

Theft from trailers, site sheds and utes is the loss builders see most. Policies set conditions on storage and on tools in transit versus on site, and hired-in plant is often treated separately. See tool insurance and business vehicle insurance.

The personal side

ACC covers accidents, not illness. See income protection for tradies, ACC for contractors and business protection. For the wider picture, start at the business insurance hub.

How we help

A Smiths adviser will phone you to talk through which covers to look at. Some business covers we refer to another licensed Financial Advice Provider, and we will tell you who, and how they are paid, before your details go to that firm. There is no instant online price. Smiths Insurance & KiwiSaver may receive a commission or referral payment if you buy. Cover and price depend on insurer underwriting and the policy wording. Financial advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931).

Frequently Asked Questions

Is builders insurance compulsory in NZ?

No general law makes a builder hold a liability policy. In practice, contracts and main contractors often make it a condition, so you will need to show a certificate of currency. Read each contract's insurance clause.

What is the difference between contract works and public liability?

Contract works insures the building work and materials against loss or damage. Public liability pays for injury to other people and damage to their property.

Who insures the house during a build?

Whoever the building contract says. On residential jobs it is often the builder, but confirm it in writing and check the owner's own policy.

Can a builder be sued years after finishing a job?

Yes. Under s 393 of the Building Act 2004, civil proceedings about building work can be brought up to 10 years from the act or omission they are based on.

Does construction insurance cover bad workmanship?

Often not. Many policies exclude the cost of redoing faulty work, although resulting damage may be treated differently. Ask your adviser how the wording handles it.

References

Related industries

Protect the people behind the business

Liability cover protects the business from claims. If you or a business partner could not work, or died, key person and shareholder cover can help keep the business, and your family, going.

  • Key person cover, if the business relies on you
  • Shareholder cover, so partners can buy each other out
  • Income protection for owners and the self-employed

Know who covers the build before you start

A licensed Smiths adviser phones you and asks about the jobs you build, who insures them under your contracts and whether you use subcontractors. If we refer you to another licensed firm, we tell you who first. Smiths Insurance & KiwiSaver may receive a commission or referral payment if you buy.

A licensed Smiths adviser phones you. If we refer you to another licensed firm we tell you who first and how they are paid.

Read the full insurance guides

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