What are the key risks for property developers?
Property development can be an exciting and financially rewarding industry - but the risks can be significant.
As a property developer, you need to be across a range of council regulations and manage complex finance arrangements. You may also have to deal with the rising costs of materials and labour, missed deadlines and budget blowouts. Then there’s the chance your builders could become insolvent, weather events could damage your project, or equipment and materials could be stolen or lost. Finally, like all businesses, property developers need to be vigilant in protecting themselves and clients from the growing threat of cybercrime.
Who should consider insurance?
All property developers - from those developing a house to those in charge of major retail and factory developments - should take out some kind of insurance.
What insurance should you take out - and what can it cover?
Some property developers take out contract works cover - but often, it’s their builder who takes out the contract works policy. If your builder is responsible for taking out contract works, make sure you are named on the contract as an insured. You should also ensure the policy extends to any sub-contractors working on your property development project. You may also require other types of cover, depending on the type of business you are running.
| Type of cover | |
|---|---|
| Business pack |
For a larger business and with office space, this cover protects your business against:
|
| Contract works - generally the builder takes out this cover and names you as insured on the policy |
Generally the builder takes out this cover and names you as insured on the policy. Protects any buildings under construction and construction equipment. This cover may include protection against:
|
| Cyber | Safeguards you and your business against expenses and legal costs if your website or other systems are hacked and your customers’ details are stolen. |
| Management liability | Covers your liability to third parties as businesses managers, for such things as Employment Practice Liabilities for wrongful dismissal or discrimination, Statutory Liabilities for breaches of Corporations Law, breaches of Fair trading law etc |
| Workers’ compensation | Covers the cost of your employees’ wages, rehabilitation and medication if they become injured or sick through their work. |