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Construction insurance

Construction insurance

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Compare business insurance quotes from 14 leading UK insurers1

Comparing deals from more providers makes it easy to find the right cover and price for your needs, helping you save money.

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1Accurate as of May 2024

How does construction insurance work?

Construction insurance works by providing financial protection in the event of a claim. If a claim is made against you, while you are insured, your insurance company will pay for the cost of the loss, up to the limits of your policy. 

You need to select the type of cover that is relevant to your business in the construction industry – including builders, architects, and general contractors. Your policy can extend over a three, six or 12-month interval during the course of your project.  

When you take out construction insurance, you can choose your level of cover, which is the amount you’ll be insured for against any claims. Businesses with a higher turnover or more employees will usually need more cover. You’re also likely to need more cover if you’re working in an especially risky area of construction, where there’s more danger of an accident or injury. A higher level of cover means higher premiums, so make sure you pick the right policy for your business. 

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What insurance do construction companies need?

Every business is unique – but a good construction insurance policy should cover you against all the major risks of the trade. Here’s what should be included:

  • Public liability insurance

    On a building site, there’s always the risk that a passerby could be hurt, or you might damage someone’s property. This protects you against any extra costs if that happens

  • Employers’ liability insurance

    If you have any employees, this is a legal requirement. It keeps you covered in case anyone suffers an injury as a result of the work they do for you

  • Professional indemnity insurance

    If a client suffers losses as a result of work you’ve carried out, professional indemnity insurance will protect you against any compensation claims

  • Tool Insurance

    You’ve invested a lot of money in your tools and equipment. Tool cover makes sure you won’t have to replace them yourself if you’re lost, damaged, or stolen

How much is construction liability insurance? 

According to MoneySuperMarket data, 51% of customers paid up to £10.832 per month in 2023 for public liability insurance.

However, this price can range depending on the following factors:   

  • The size of the business 

  • The level of cover that is required  

  • The insurer’s risk assessment.  

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251% of customers paid up to £10.83 a month direct debit for a standard public liability insurance policy. MoneySuperMarket data collected between October 2023 and December 2023

What does construction insurance cover?

With construction insurance, you’re protected against many of the dangers that come with working in construction – but there are some exceptions. Here’s what you’re covered for:

  • Tick

    What’s included

    • Accidents and injuries: You’re protected if someone is injured on site, whether it’s one of your employees or a member of the public. You can also protect yourself with personal injury cover

    • Faulty work: If there’s a problem with your workmanship, insurance has you covered. Your insurer will pay out for any claims for professional negligence, breach of contract, or faulty products

    • Tools and materials: Tools can be valuable, and there’s always the risk that they could be lost, stolen, or damaged. Your insurance will pay for replacements, and this can even include hired tools

  • Cross

    What isn’t

    • Malicious damage: If it’s found that you or one of your employees deliberately caused damage, or intentionally injured someone, your insurer will usually refuse your claim

    • Costs beyond your cover: For example, if a court orders you to pay £10 million in damages, but you’re only insured for £5 million, and your insurer won’t pay out the full amount – that’s why it’s crucial to get the right level of cover

    • Your excess: All insurance comes with an excess – that’s the amount you’ll have to pay yourself towards any claim. A bigger excess usually means cheaper premiums – just make sure it’s an amount you’ll be able to pay 

Sam Meadows

Our expert says


The construction industry has inherent risks and while some are obvious, others are less so. Having the right level of construction insurance in place will help you mitigate the financial cost should an unfortunate event occur such as an accident or property damage on a job your firm is working on. Some insurance will be mandatory and other insurance optional, so fully research what your company needs before you apply.

- Sam Meadows, Insurance Expert

Compare construction insurance

Comparing business insurance quotes with MoneySuperMarket and our preferred partner SimplyBusinessis 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, who you employ, and how much cover you need, 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 you might find useful 

  • Choose the one you like

    Once you’ve found a deal you like, simply click through to the provider – they’ll take it from there 

Professional indemnity insurance is a type of insurance that protects construction professionals from financial losses resulting from claims of professional negligence. This can include claims for: 

  • Errors in design or workmanship 

  • Failure to meet the client's requirements 

  • Breach of contract 

  • Loss of data or documents 

  • Infringement of copyright or intellectual property 

PI insurance is essential for all construction professionals, as the cost of defending a claim can be high, and the consequences of losing a claim can be even worse. 

Public liability insurance in construction is a type of insurance that covers a construction business for legal liability arising from accidents or injuries to third parties, or damage to their property.

This type of insurance is essential for protecting businesses from the financial consequences of accidents that occur on their worksites. 

The amount of cover you need for a construction business will depend on a number of factors, including: 

  • The size of your business 

  • The type of work that you do 

  • The level of risk involved 

  • The requirements of your clients 

  • The regulations in your industry 

In general, it is advisable to have at least £2 million of public liability insurance and £1 million of professional indemnity insurance. However, you may need more cover depending on the specific risks of your business. 

The simplest way to reduce the cost of a business insurance policy is to increase your voluntary excess. This is the amount you agree to contribute to cover costs if an incident occurs. A higher excess is usually an indicator to your insurance provider that you won't make small, frivolous claims, so they will reduce your premiums.

If increasing your excess isn't an option, it may be worthwhile to reassess the insurance needs of your business. Rather than automatically renewing your policy each year, it can save you money to look at the value of your insurance policy and assess whether your cover is cost effective.

If you have employees working for you, then you will probably need employers' liability insurance. Other types of business insurance aren't a legal requirement but can provide valuable protection, especially:

  • Professional indemnity insurance will cover you in the event that have made a mistake while providing a service for a client

  • Business and office equipment insurance will cover any of your important equipment that you keep at home or a rented premises

  • Stock insurance can be worthwhile if you are selling items online and want to insure them while they're being stored on your premises

  • Legal expenses insurance can help you cover the legal cost of contract disputes, data protection, tax protection, corporate identity theft and more

  • Business interruption can help support your business if, for example, your office building is flooded and you're unable to work until new equipment is bought

The only insurance that you are legally required to own as a sole trader is employers' liability insurance, which you would only need if you hire employees.

No other types of insurance are legally required but there is very good reason to consider them. As a sole trader, all business expenses fall on you. If something goes wrong on the job, that means that you will be responsible for covering costs.

For that reason, it's worthwhile to consider public liability insurance at least to protect you from expensive legal fees.

No, you don't need to register your business to buy business insurance. You can buy business insurance before you register your business or as self employed. However, it is generally a legal requirement that you register your business.

The only compulsory business insurance is employers' liability, which you will need if you have hired any employees for your business.

Other types of business insurance, like public liability, aren't legally required but there certain trades where they may be required for other reasons.

Commercial property insurance is another term for business building insurance. This type of policy will insure the property that you use for your business against structural damage. This includes cover for fire, vandalism, and flooding.

Commercial property insurance is only a worthwhile insurance if you actually own the building you use for business operations. If you rent the property, it is typically the responsibility of the actual property owner to take out insurance to cover the building.

If you only rent your business building, then you would only need to insure the contents of the building, which can be covered by business and office equipment insurance as well as stock insurance.

Business interruption insurance will cover your business for loss of income or gross profit if an unexpected even prevents you from operating as usual. For example, you might be forced to halt operations if your business building is flooded or if a fire ruined your stock. In which case, your business interruption insurance would pay out to cover the loss and additional expenses you may need to keep your business running.

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