Contractor put in their contract that they aren’t responsible for fixing lines if they break water and or sewer lines because they don’t know where they are. If they do end up breaking them, does their insurance still pay for repairs?
Ordinarily, the burden for marking those lines falls on the owner of the property. You may want to see if you can locate the initial plans for your home.
However, if the contractor is performing excavating or other work where this is a possibility, you should speak with them about potentially locating those lines.
If not, water lines and sewer lines are typically not the end of the world if they break. Fairly easy and fairly cheap to fix most of the time. For this reason, most owners risk these types of breaks, because the initial locating is almost as expensive.
To answer your other question though, no the insurance company will not pay for those repairs, especially not if those repairs are specifically excluded from the contract.