Insurance for school property projects

Learn about the types of insurance that schools and suppliers must have in place during a school property project.

Level of compliance Main audience Other

Required

  • Project Managers
  • Suppliers
  • Principals and Tumuaki
  • Property Managers
  • Boards
  • Proprietors

Appropriate insurance coverage is required for all property projects at schools.

Contract works insurance

Contract works insurance covers accidental loss and damage when construction works are taking place.

Only the works being undertaken under the contract are covered under the Ministry’s policy. This policy does not cover damage to existing property (insured separately) or to the contractor’s plant or equipment.

When a project involves a building or other asset that is, or will be, owned or partly owned by the Ministry, the Ministry’s contract works insurance policy must be used by the school. This policy is free for schools to use.

If a project is wholly funded by the school board and on the school’s site, the school can choose either to use the Ministry’s contract works insurance policy (free for schools to use) or arrange an alternative policy.

Applying for the Ministry’s contract works insurance

Input the details of each contract that is to be insured into the Marsh (the Ministry’s insurance broker) website.

Ministry of Education Contract Works Facility (marsh.com)(external link)

If the project involves tunnels, work in water, or work below the high tide mark, contact Marsh before applying online.

Applications will either be accepted automatically, or require review.

Process Description

Automatic acceptance

 

For construction works with a contract value up to $15 million, with a construction period less than 18 months and a defects liability period of up to 12 months.

 

Acceptance is confirmed after application submission in the form of an insurance certificate.

 

Every insurance certificate issued has an identification number and is uniquely associated with its relevant contract.

 

Special acceptance

 

For construction works with a contract value greater than $15 million, or under construction for longer than 18 months, or with a defects liability period exceeding 12 months.

 

After application submission an email will be sent by Marsh stating that the request is ‘outside of guidelines’ with a follow-up seeking additional information.

 

Once the additional information is received the application will then be reviewed by Marsh and insurers.

 

If accepted, an insurance certificate will be emailed after review.

 

Every insurance certificate issued has an identification number and is uniquely associated with its relevant contract.

 

Schools should keep contract works insurance coverage up to date. If there are any delays in the project, alter the cover accordingly.

Making a claim

If an incident has caused damage to the contract works, contact Marsh immediately.

Email: moe_cws@marsh.com

If urgent, call Martin Holden at +64 4 495 8508

Also advise the school property adviser, particularly if damage has been caused to existing property.

Works can continue after an incident. However, schools must ensure that records are kept of the incident by:

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

A ‘contractor deductible’ of $5,000 applies to most contract works insurance claims. It is set at $25,000 for losses arising from testing and commissioning.

The contractor deductible is paid by the Ministry, except where the loss, damage, or liability arises out of an act or omission of the contractor (in which case, the deductible must be paid by the contractor).

Contents insurance

Schools that are not insured under the Ministry’s Risk Management Scheme should ensure that their contents insurance is not invalidated when there is a property project on-site.

See more on Contents insurance for schools

Professional indemnity insurance

Professional indemnity insurance provides cover for financial loss as a result of negligence, errors or omissions by a party providing professional services (such as architects, engineers, etc.).

A professional indemnity insurance policy will cover the:

  • service provider’s legal costs; and
  • cost of a claim for compensation that the service provider is legally liable to pay.

All consultants engaged for a project are required to hold professional indemnity insurance.

The default levels of professional indemnity insurance in the school-led consultant agreements are as follows:

  • Short Form Agreement (SFA) – $500,000.
  • Form of Agreement for Engagement of Consultant (CCCS) - $2,000,000.

If a contractor has any design responsibility under a construction contract, they must hold a suitable level of professional indemnity insurance to cover liability in respect of the design services that they are providing. For construction contracts, the level of professional indemnity insurance required is linked to the value of the design works that the contractor is responsible for.

  • The template school-led Medium Works Contract requires $1,000,000 of professional insurance where a contractor is providing design services.
  • The template school-led Major Works Contract includes guidance in Schedule 1 on the appropriate level of cover.

The above coverage levels are the default minimums. It may be appropriate to increase the required level of coverage if there are relevant project-specific risks.

Public liability insurance

Public liability insurance provides cover for financial loss if a contractor or consultant is found liable for loss or damage to another party’s property or causes illness or injury to another party (where the loss is not covered by ACC).

All contractors and consultants engaged for a project are required to hold public liability insurance. It is their responsibility to arrange the required cover.

The default levels of public liability insurance in the school-led consultant agreements are as follows:

  • Short Form Agreement (SFA) – $2,000,000.
  • Form of Agreement for Engagement of Consultant (CCCS) – $5,000,000.

The default levels of public liability insurance in the school-led construction contract templates are as follows:

  • Minor Works Contract – $1,000,000.
  • Medium Works Contract – $2,000,000.
  • Major Works Contract – $5,000,000.

The above coverage levels are the default minimums. It may be appropriate to increase the required level of coverage if there are relevant project-specific risks.

Schools should view their contractor’s/consultant’s public liability insurance cover note to confirm that the insurance is in effect.

Public liability insurance must be renewed if the project goes over 12 months.

Suppliers’ plant and motor vehicle insurance

Contractors and consultants should, if applicable, have their own plant and motor vehicle third party liability insurance.

There are specific requirements in the school-led template construction contracts in respect to plant and motor vehicle third party liability insurance. Contractors and consultants are required to comply with these requirements.

Last reviewed: Has this been useful? Give us your feedback