DEFINITION of 'Work And Materials Clause'

A provision in many property insurance policies that allows the policyholder to use the insured premises to store materials and to use the materials in the manner required by his or her line of work. The work and materials clause circumvents the increased hazard clause that is found in standard fire policies, which states that the insurer would not be liable for losses occurring when a hazard is increased and is known by and within the control of the insured. Without the provision, a policy could be voided for misrepresentation of an undisclosed increased hazard, fraud or concealment (the misrepresentation of a material fact, before or after a loss).

BREAKING DOWN 'Work And Materials Clause'

The work and materials clause acts as protection for policyholders against a claim that the insured knowingly increased a hazard if it can be shown that the materials or work in question were essential to the policyholder's line of work. The clause works to the benefit of the policyholder since without it claims could be denied based on the insured's prior knowledge and control of a hazard.

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