05 May 2026 | Insight
The construction market continues to evolve, and so do the risk conversations that sit behind it. In our first two articles, Introduction to Construction All Risks Insurance and Understanding Defects Exclusions in CAR Policies, we explored how construction all risks (CAR) structures respond during the build phase and where insurers draw the line on defect‑related loss.
This next instalment moves the discussion beyond completion. Post‑handover is often where misunderstandings arise, particularly around what “maintenance period cover” protects, how defects obligations operate in practice, and where options meaningfully differ. By breaking down the terminology and the three core variants of post‑completion cover, we aim to give contractors, owners and brokers a clearer view of how risk transfers once the works are handed over.
Firstly, the point at which the project is handed over, marks the point at which the contractor no longer has “care of the works”. From this point in time, known variously as completion, practical completion or handover, the property is now at the risk of the owner who is responsible for loss or damage. The term practical completion recognises that the works are substantially complete and that only minor works, commonly referred to as snagging, remain. The contractor is obliged to complete the snagging works promptly following practical completion.
The exception to this is in the event of a defect which remains the responsibility of the contractor. The duration of this obligation is normally six years from the date of completion for normal contracts, rising to twelve years for those contracts executed as a deed. During this period, the contractor is liable to the project owner for defects in the project works and the consequences arising therefrom. This period is properly known as the defects liability period.
The contractor’s obligations during the defects liability period are more onerous during the first 12 or 24 months. During this initial period, the duration of which is specified in the contract, the contractor is obliged to return to rectify any defects, which is a more onerous obligation that simply being liable for them. For some reason, this period is commonly known as the maintenance period, even though the contractor is not responsible for property maintenance once completion has been achieved. It is also frequently referred to as the defects liability period, but we know that this is incorrect as we have already identified this above as the six-or twelve-year period. My preference is to call this the defects rectification period, as this concisely and accurately reflects the contractor’s responsibility.
There are three main variants of post completion cover, colloquially known as maintenance period cover, all of which apply to the first 12-24 months post completion. In exceptional circumstances, these covers have been extended beyond 24 months. The variants, with typical wordings, are as follows:
Wording: This insurance is extended for the maintenance period (as defined) to cover loss of or damage to the contract works caused by the contractor during operations carried out for the purpose of complying with the obligations under the maintenance provisions of the contract.
Interpretation: This is very limited cover, which only protects against damage caused to the completed project during snagging works. There is no cover for damage arising from defects committed prior to handover as the extension only covers the activity undertaken in the defects rectification period.
Wording: This insurance is extended for the maintenance period (as defined) to cover loss of or damage to the contract works:
Interpretation: The first element of the clause replicates the cover provided under the visits maintenance variant. The second goes on to provide cover for damage occurring during the defects rectification period as long as that damage was caused on site during the construction period prior to completion.
The important distinction here is between the occurrence of damage and its causation. Damage occurring during the defects rectification period might arise from a defect which was incorporated during the construction period, and this is what the extended maintenance variant is seeking to cover. Note also the requirement that the defect was caused on site and during the construction period, as this may rule out cover for damage arising from pre-construction design errors.
Wording: The Insurer shall indemnify the Insured in respect of loss of or damage to Property Insured which occurred during the defects rectification period specified hereunder which:
Interpretation: As with extended maintenance above, the first element of the clause replicates the cover provided under the visits maintenance variant. The second element goes further than extended maintenance by (i) removing the requirement for the damage to have been caused on site and (ii) removing the restriction of causation during the construction period. As long as the damage was caused prior to completion, there is no restriction on pre-construction causation.
We consider that visits maintenance cover is insufficient to protect clients against post completion liabilities for damage and will only be seen on significantly distressed cases. Clients should not accept this coverage from their insures unless there are egregious reasons for insurers insisting on its application.
In reality, insurers will be offering either the extended or guaranteed variants. We feel that guaranteed cover is widely available on annual placements and CAR projects, usually for a period of 12/24 months depending on the contract requirements. This might be limited to extended cover for EAR projects.
Clear post‑completion cover is essential to avoiding costly surprises once the works are handed over. If you want to sense‑check your current CAR or annual programme, the Price Forbes UK&I Construction team is ready to review it with you.
When something goes wrong on a project, defects exclusions often decide who pays and how much. Small differences in wording, combined with changing case law, can turn an expected insurance recovery into an uninsured cost. Getting the right advice upfront is critical to avoiding delays, disputes, and unexpected losses on complex construction projects.
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An introduction to Construction All Risks (CAR) insurance, explaining key policy structures, core terms, and how ‘all risks’ cover works to help construction projects navigate evolving complexity with confidence.
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