Who needs Builders Insurance?
If you are a builder you know you need builders insurance, but this can sometimes be complicated, most people know that Public Liability is essential but when is it required, and of course you might ask yourself whether you need it at all.
Builders insurance in its very basic form will include Public Liability, Product Liability and if you engage labour, even voluntary then Employers Liability is not only an essential cover but one that is required by law.
For many builders having insurance in place is there to provide that peace of mind that if anything goes wrong then you have someone by your side to guide you through a claim scenario.
If you are employed on a building site then it’s almost certain that you will have to provide proof of liability insurance if you don’t have a minimum level of public liability cover you probably won’t be let on site.
Insurance for builders is is usually quite straight forward. So if Stretcher bond, English bond or Flemish bond brickwork is your thing, traditional oak framed building work, building refurbishment or historic building renovation or the more up to date timber constructed buildings, speak to us about your needs, we speak your language.
As a builder you don’t always know what your next job will entail, working at heights on scaffolding, using machinery such as cement mixers, mini-diggers or excavators, powered wheelbarrows or cherry pickers.
As a builder, you are exposed to all types of risk so you need the confidence that the insurance policy you have allows you the flexibility without wondering if your insurance provides wide enough cover.
Speak to us today about your business, not all insurance policies are the same and just doing cheap isn’t necessarily the best way forward. We will provide the advice you need and not just leave you on your own.
What cover is included on a builders insurance policy?
The world of builders insurance is your oyster… or something like that!
One size doesn’t fit all, cover can be flexed to reflect your exact requirements, buy what you need as and when you require the cover to be increased, it typically starts with builders public liability insurance.
This protects you against claims made by members of the public that have allegedly suffered injury, illness or a loss as a direct consequence of your work as we have already seen. The cover is usually purchased in various levels of cover called a limit of indemnity.
What is a Limit of Indemnity?
A limit of indemnity is the limit of public or products liability on the insurance policy that you have purchased, cover levels typically start at £1m through to £5m, typically though the minimum is usually £2m we can offer enhanced levels should they be required, £5m or £10m and for a certain contract where required we can obtain cover for many millions higher than this.
Remember that the level of cover you need may very well be dictated to you by your employer either before they will give you the contract or as we have seen earlier even let you on their building site.
“I have people who do work for me, do I need Employers Liability Insurance?”
There can be a general misconception that if someone is self-employed or works voluntarily and does work for you that you don’t need to cover them as employees.
Although there are some exclusions, if you have anyone that carries out work for you or provides labour then you will need to have something called Employers Liability insurance, it’s not only essential its also compulsory insurance and you must have it by law.
As a builder, the chances are that you employ people to carry out work for you, even if they are a builder’s labourer. Directly employed people are usually paid as PAYE, they carry out work for you under your instruction and you pay them at the end of the week or month.
Sometimes though, say a bricklayer that is doing building work for you, a house extension, building a wall, helping with a renovation project where specialist stonework skills are required, whilst he carries out work for you, he may move on another job for someone else. He just effectively provides labour to you and in most cases, he/ she has their insurance in place.
Do you need to provide cover for this person? The simple answer is in most cases, yes you do, you are still responsible for their actions so your employer’s liability and public liability insurance will need to include them.
“I only employ businesses that have their own insurance.”
Sometimes you might employ specialist trades whilst your business might be a builder, these specialist trades might be electricians, joiners or plumbers. They give you a price for the work, if they need to hire plant, employee people and carry out their risk assessments then the chances are they are what would be termed Bona-Fide Sub-Contractors.
Do I need to cover Bonafide Sub-Contractors?
Bona-fide subcontractors are usually responsible for all of their actions, the only cover that would usually be needed would be contingent public liability cover. It is usually their responsibility to have all their insurances in force.
What does Builders Employers Liability Insurance cover?
Employers Liability Insurance is designed to protect you and your business if a worker is injured, made unwell or suffers damage or loss to property as a consequence of their work with you.
Employers Liability for a builder would pay for legal fees that might be incurred defending a claim, as well as any compensation that might be due. The UK minimum amount of cover is £5m, although, in reality, insurers provide £10m as standard.
What other types of insurance is available for a builder?
Many additional insurance covers are available, these all protect your business, in many instances, they can just be added to an existing policy or a standalone policy is available.
Hired in Plant Insurance
Hired in Plant is something that happens in many builders daily lives, why tie up money in something that might only be used occasionally. Mini-diggers for digging out footings for that new extension, tower scaffolding to get you to that all-important wall plate ready for the roof trusses to be installed, cutting things such as blockwork for that new door is done much better and easier with a disk cutter.
Sometimes it’s assumed that the item being hired is automatically covered by some insurance – this is seldom the case unless you have bought insurance on the item that you are hiring.
You will need Hired in Plant Insurance.
Hired in Plant insurance is easily obtained, if the item is a one-off or you don’t hire very often it’s worth asking the people you are hiring from, if it’s a frequent event then a Builders Hired in Plant insurance policy should be considered.
Tools & Equipment Insurance
People in the construction sector need protection for their Plant and Equipment, whether that is just a box of tools or you have business premises full of equipment. Buying insurance to cover all your tools and equipment should be very easy, many policies for builders will provide options and can be bespoke to your needs.
Can I cover the building materials for a contract on-site?
Yes, of course, these are usually referred to as a Contract Works Insurance Policy, it covers exactly what it says on the tin, the works themselves which means it can extend well beyond just the materials to be used.
Contract works insurance covers the materials waiting to be used as well as those that are already used in the construction against such things as fire, storm and of course theft.
Whilst it’s unlikely you are going to notice a bucket of sand or the odd bag of cement being stolen, you might just be a little more concerned about the expensive products that are going into the construction project, specialist timbers, those very expensive triple glazed aluminium windows, that bi-fold door that someone thinks will look better in their house… you get the picture.
So, you are nearing completion and there is a fire that affects the main building that you have added that new extension, part of it is damaged and will need to be rebuilt or repaired, this is where your Contract Works Insurance will respond.
Many different types of cover can be obtained for a Builder, it depends on the work that you are doing.
Existing Structure Insurance – you may be responsible in the contract with your employer to cover the existing structure that you are building on.
Non-Negligent Liability – this is commonly referred to as JCT 21.2.1 insurance, inner-city cellar extension, can’t go up, can’t go sideways so go down. All types of things can wrong such as collapse, subsidence, or weakening of support of neighbouring properties. Speak to us in advance about your JCT 21.2.1 insurance requirements, one of those insurance covers that are usually left until the last minute.
Professional Indemnity Insurance for Builders
Buying Professional Indemnity Insurance isn’t just a case of going online and just getting cover, there are different types of Professional Indemnity Insurance. A builder PI Insurance would typically be called Design & Construct and is exactly what it says, for builders that design and construct.
What is the difference between builders Professional Indemnity Insurance and say an Architect, in simple terms the architect is providing advice, they are not carrying out the work, they have different policies and needs to a builder.
Speak to us about Professional Indemnity for your builders business, we have access to a wide insurer panel for this type of business.
Builders Insurance that’s a little out of the norm!
Obtaining insurance can be straightforward, that is until you are somewhat of a specialist.
Working with traditional building materials such as lime mortars, hand made specialist bricks or special processes on historic houses or high value historic or heritage buildings, you need to obtain the correct cover with underwriters that understand exactly what you are doing.