Defects Exclusions in Contract Works Policies Why the small print matters more than ever — and what's changing. A Contract Works claim rarely turns on whether there's cover for damage — it turns on the defects exclusion buried in the policy wording. The clause selected, whether DE3, DE4, DE5, LEG2 or LEG3, can be the difference between a claim being paid in full and a client being left to fund a significant shortfall themselves. With the London Engineering Group (LEG) confirming it will release updated clause wordings by the end of August 2026, this is a timely moment to revisit how these exclusions work and what you should be discussing with your clients.

Most brokers have encountered it. A contractor with a strong reputation. Quality projects. Experienced leadership. Good relationships in the market. On paper, a business that appears to be exactly the type of risk insurers should want to support. Yet the underwriting outcome doesn't always reflect that.

Extreme weather is no longer an occasional disruption for construction projects. It is increasingly part of the operating environment. Flood, storm and cyclone events are occurring more frequently and with greater severity, and the impact on construction risk is becoming clearer with each major loss event. For brokers placing construction risks, the implications are significant. Extreme weather is reshaping underwriting expectations, programme structure and claims outcomes across the market.****

The construction sector remains one of the most active — and most complex — areas of liability insurance. For brokers, supporting contractors and builders has become increasingly challenging as claims rise, regulatory scrutiny intensifies, and subcontractor exposures expand.

Australia’s commercial liability landscape is becoming increasingly complex. Regulatory scrutiny is intensifying, claims costs are rising, and courts are showing less tolerance for businesses that cannot demonstrate active risk management. For brokers, this environment presents both a challenge and an opportunity—particularly in aligning clients with cover that not only responds to claims but actively helps prevent them.

Joining Scope at an exciting stage of growth, Sam brings a relationship-driven approach and a clear focus on supporting brokers and delivering practical underwriting solutions in the construction space.

Record builder insolvencies are now a mainstream construction risk in Australia, not a fringe scenario. ASIC linked data shows construction insolvencies reached decade highs in the year to June 2024, and more recent reporting indicates the building sector has since pushed to even higher levels, with thousands of collapses recorded across FY2025.

In the construction industry, liability exposure is complex and often involves multiple parties, from the project owner (Principal) to the contractors and various subcontractors. This complexity requires a different approach to insurance than the standard Broadform Liability policies used by businesses outside of construction.

In the construction industry, safety is paramount. Despite the best efforts to maintain a safe work environment, accidents, injuries, and near misses can occur. When these incidents happen, it's essential to have a robust process for recording and reporting the details. Accurate and timely incident reports not only help safeguard workers but also protect the financial interests of the business and ensure insurers can properly assess and mitigate risks.

A Principal-Arranged Insurance program (PAI), sometimes referred to as a “wrap-up”, Principal Controlled or Owner Controlled program, enables a principal or owner to take control of procuring the insurance for their project, covering all contracting parties for their respective rights and interests.

Rob Higginson, Scope Underwriting's Co Founder & CEO talks about bringing Scope to market with Co Founder Nick Vernon, key industry trends and the availability of construction capacity looking ahead.