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Builders' insurance

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1Accurate as of November 2023

What is builders' insurance?

When you work in construction, there are a lot of risks that you are exposed to that can have devastating consequences. Having your equipment damaged, your vehicle stolen, or facing liability claims for an injury are problems that can cost thousands of pounds to resolve, which not every business can afford.

If you own a building business or are just getting your business started, these costs can put a huge strain on your finances. Thankfully, there are some important insurance products you should know about that can protect you and your employees from problems like these.

There are several different types of insurance for builders that can protect you from all sorts of problems, like theft, damage, and liability claims. The right builders' insurance policy will provide you with a pay-out when something bad happens to help your business return to normal.

Man sawing

Why do builders need insurance?

If you have any employees working for you, it is a legal requirement that you have employers' liability insurance. This insurance will make sure that you can properly compensate your employees if they are injured or fall ill as a result of their work.

Other insurance types aren't a legal requirement but they each have their benefits. Builders’ public liability insurance, for example, can cover you for the cost of damages, compensation, legal fees, and medical expenses if you’re responsible for the injury or death of a third party or damage to their property. It can help in situations such as:

  • If a brick falls and hits a member of the public as they pass by your building site

  • If a piece of scaffolding collapses and damages a vehicle

  • If there is a structural defect that causes an injury or death

Additionally you may find that many potential clients will request that you take out public liability insurance, or they might refuse to hire you.

What types of builders' insurance are available?

There are several different types of insurance for builders that will offer different types of protection. The only type of builders' insurance that you are legally required to own is employers' liability insurance if you have any people working from you. The others have the benefit of saving you from expensive claims if you accidentally damage someone else's property, cause injury to someone, or make a mistake in your work that results in a loss for your client.

The following are some of the main types of insurance for builders:

  • Public liability insurance

    Builders’ public liability insurance can cover you for the cost of damages, compensation, legal fees, and medical expenses if you’re responsible for the injury or death of a third party or damage to their property

  • Employers' liability insurance

    If your business has employees, then employers’ liability insurance is a legal requirement. It covers you for any compensation costs if an employee becomes injured or ill as a result of their work

  • Tool insurance

    Tool insurance will protect your important tools and equipment. If they're damaged or lost –either stored at home or on-site – your insurance policy will pay out to help you cover replacements and repairs

  • Professional indemnity insurance

    Professional indemnity insurance covers you for any mistakes you may make in your work if they cause a loss for your client. This includes financial and reputational loss

  • Business interruption insurance

    Business interruption will help keep your business going if an emergency prevents you from operating. It can cover lost income, staff wages, or the cost of moving to a new property if you need to

  • Business building/ contents insurance

    If you own a building as part of your business, you can purchase insurance to protect the building from accidental damage as well as the important contents if they are damaged or stolen

What is and isn't included in builders' insurance?

The cover of your builders' insurance policy depends mostly on the type of insurance you purchase. Below is a list of only some of the things that you can get insurance cover for and a list of things you can't:

  • Tick

    What can I cover?

    • Financial loss: This can cover you for any compensation you would have to pay to a third party that wasn’t caused by damage to or loss of physical property

    • Business vehicle cover: Standard motor insurance policies won't always cover vans that are used for your business, so a special business policy is needed

    • Legal expenses: Legal expense cover can help you pay for legal costs for things like employment disputes, property disputes, and tax investigations

    • Accidental death: An accidental death policy offers a lump sum should you or an employee die as a result of an unforeseen incident

    • Tools and equipment: This will provide cover to replace any tools or equipment you have as part of your work if they’re damaged or stolen

    • Business contents:business contents policy covers items you need for your work, such as office furniture or computers and phone systems, if they’re damaged or stolen

    • Professional indemnity: This covers you if your building business is responsible for any professional negligence

    • Personal accident: Personal accident cover offers a lump sum payment if you or an employee are no longer able to work as a result of an accident

  • Cross

    What's not covered

    • Intentional harm or damage: Most insurance policy types are unlikely to cover you for any damage or harm caused to someone intentionally – either by yourself or an employee

    • Negligence: Most business insurance policies won't cover you for events that are caused by negligence. This includes public liability cover as well as other insurance types, such as tools cover

    • Drugs or alcohol: Insurance won't cover you if you or your employees were under the influence of drugs or alcohol when the insurable event occurred

    • Damage to property being worked on: Some public liability insurance policies won't cover damage caused to a person's property or belongings while you are working on them. For that reason, you should read the terms of your policy carefully when you apply

    • Wear and tear: Tools and equipment insurance won't pay out for damage or breaking of tools or equipment that are the result of general wear and tear

    • Breach of contract: Some types of builders' insurance will exclude cover for liability arising from breach of contract

    • Improper use of business vehicles: If you're using your work vehicles for purposes that aren't under the description of use, or if the person driving is someone not covered by the policy, your insurer won't cover you for any damage to or loss of the vehicle

Sam Meadows

Our expert says

"

More than many trades, as a builder there is a lot that could go wrong. You could make a mistake which leads to a claim, there could be an injury to yourself or an employee, or your expensive equipment could be damaged. Having a comprehensive range of insurance policies will mean that you can be confident that any unexpected events aren’t financially ruinous for you or your business.

"
- Sam Meadows, Insurance Expert

How to compare builders' insurance

Comparing business insurance quotes with MoneySuperMarket is the easiest way to find an affordable deal on cover. Here's how it works: 

  • Tell us about your business

    Let us know about your business and what it does, and we'll find deals tailored to your requirements

  • Compare deals

    You'll be able to compare your offers by cost, level of protection and any extras that are available

  • Choose the one you like

    Once you've found the right deal for you, just click through to the provider to finalise your purchase

Standard public liability insurance policies won't cover you if a client claims that you performed faulty work. Similarly, most professional indemnity insurance policies won't cover you for defective workmanship either.

These insurance policies are designed to protect you where issues are caused by genuine mistakes and not negligence or irresponsible practices.

If you hire labour only subcontractors or contractors to work for you or your building business, you will need employers' liability insurance. These types of contractors are considered employees under UK law, so it is a legal requirement that you take out this insurance for them and you take on responsibility for any claims of liability that involve them.

However, you may not need insurance if you are working with bona fide subcontractors as they are likely to have their own liability insurance in place for them and their and employees.

The cost of insurance for builders' will depend on a number of different factors. These usually include:

  • The type of insurance

  • The level of cover and any optional extras you add to your policy

  • The number of employees you have

  • Your insurance claims history

  • Your legal history

  • Your annual turnover

  • Your excess

For a better look at how much a policy will cost to insure your business, why not compare quotes with us? It's quick, easy, and accurate.

You absolutely will need to insure any vans or vehicles you use for your business. Business van insurance will ensure that your van is properly protected both on and off the road while you're using it for business, and some policies can even protect tools and equipment that you store in your van.

If you own several vans that you use for your building business, you can also take out fleet van insurance which will provider cover for multiple vans under one policy.

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