The Contract Works Policy covers the obligations imposed on the contractor by the contract conditions. These contract conditions are often laid down in the standard form of building contractors. The general pattern of these contracts is to make the contractor responsible for loss or damage to the Works in certain circumstances and to require him to insure that responsibility under a policy satisfactory to the employer. Either the contractor or the principal can insure the contract works under a policy of insurance.
The cover incepts from the commencement of work and is terminated either on the handing over of works to the principal or at the expiry date of the policy, which ever is earlier.