Perhaps the most important insurance a builder should carry is public liability insurance. Unless the builder is a sole trader then you would expect them to also carry at least employers’ liability too.
Builders Public Liability Insurance
Public Liability covers compensation for injury or accident to a third-party persons or property as a result of negligence. For example, if a builder is carrying out works on a property and a member of the public is to trip on building material that isn’t secured properly, then compensation would be paid for any injuries to that person. Another example, a builder is carrying out works on a property and they damage another property by mistake then compensation will be paid for repairs.
The limits of cover usually start at £2,000,000 and can be increased to £5,000,000, with some insurers offering £10,000,000.
Can you check a builders insurance?
Unless a builder is a member of an organisation within the construction industry that insists upon insurance then there is no real legal requirement for them to carry their own insurance however it does raise concerns if they do not. It is also quite common for a client to request they see a builder’s insurance before they will appoint them or allow any works to begin. Some clients will even go as far as contacting the builder’s broker or insurer to check the information they are given is valid.
Do builders need Professional Indemnity Insurance (PII)?
Public liability insurance is not to be confused with Professional Indemnity Insurance (PII) which not all builders will take. Professional indemnity insurance covers financial loss as a result of incorrect professional advice or negligence, but it does not cover bodily injury. Builders or contractors of a larger size that are involved in the design and build will however most definitely benefit from having a professional indemnity policy also.
One thing that public liability and professional indemnity insurance do have in common is that both do not cover any claim arising from defective workmanship. There will also be an exclusion for defective products or any defective materials used.
Insurance for builders
In addition to the liability Insurance some builders will take out contract works insurance which covers the work on site against material damage. If the works is affected by a flood or fire, theft or malicious damage, then this insurance cover will pay costs to repair the damage and bring the build back to how it was just before the disaster. There are varying limits of cover and that depends on the contract sizes that a builder is used to taking on.
Cover can also be given for the builders own tools and plant and likewise hired in plant too. Levels of cover is dependent on the value of equipment as a total loss. This cover is most frequently used from theft.
How much is builders insurance?
The price of insurance for builders will always vary based upon the levels of cover that is taken out. It is important to note that insurance cover can usually be increased at any point in a policy so it is a good idea to look at your current situation and adequately insure for that. This will stop you paying for insurance you don’t need and consequently help keep insurance premiums low. If situations change and more insurance cover is required then policies can be amended.