What is self-build insurance?
Self-build insurance is a specialist home insurance that protects you and the home you’re building during construction work.
It covers you against the risk of any damage or injuries that might happen on your self-build site. It includes liability cover and physical damage cover.
Self-build insurance is suitable for both houses you are building on an empty plot of land, and for houses that you’re planning on knocking down and completely rebuilding.
Depending on the materials you’ve used to build your home and where you’ve built the property, you may also need a non-standard insurance policy to protect your self-build home once it’s complete.
How does self-build insurance work?
Self-build insurance can cover your self-build plot from the moment you have the land, up to the moment the work is complete and your new home is ready to live in.
You’ll select how long you want your self-build insurance to last for – from three to 24 months, depending on how long you see project lasting for. You can always extend the cover term if the work overruns.
You’ll need to get your self-build insurance from a specialist insurer. Most of our non-standard home insurers don’t offer cover during the self-build construction stage (if you’re completely building the home from the ground up), but your builder may be able to help you find someone.
What does self-build home insurance cover?
Self-build home insurance covers you as the employer of the self-build project, your workers, your land, your materials, and any damage to the home you’re building.
- Employers’ liability insurance: you are technically the employer of the self-build project, so employers’ liability insurance helps to cover you against the risk of your workers making any compensation claims for illness or injury
- Public liability insurance: covers you in case a member of the public is injured or their property is damaged because of your building works and they make a claim
You can also choose to add legal expenses cover to help pay the cost of any contract disputes that might come out of building your own home. Legal expenses can also help to cover the cost of evicting anybody who stays on your property without your permission.
Personal accident protection is another optional level of cover you can add to your self-build insurance and pays out a lump sum if you’re injured during building works. It can help to cover any money lost on the self-build project if you can’t help out, plus hospital fees and more. Personal accident insurance also pays out if the accident results in your death.
- The building: protects the home you’re in the process of building against any physical loss or damage that’s caused by a fire, accidental damage, storms, floods, theft or vandalism. This helps to protect the money you’ve already put into the self-build project and helps to make sure it isn’t lost
- Materials: protects your building materials against physical loss or damage from fire, accidental damage, storms, floods, theft or vandalism. This can include bricks, flooring, lighting, ironmongery and more
- Caravans and huts: any temporary buildings that you or your workers are using or living in will also be covered against physical loss or damage from fire, accidental damage, storms, floods, theft or vandalism. This can include caravans and huts
- Tools and equipment: the cost of replacing materials that are stolen from site. The cost of replacing and repairing any equipment you’ve hired in-plant – that you may still be liable for costs of anything happening to them while you have them. You can also choose to add cover for your employees’ tools – although the cover amount will often be less
The levels of cover offered for physical damage will typically be covered by a ‘Contractors’ All Risks’ insurance policy.
Do you need insurance while building a house?
If you directly employ people to work on your self-build project then you will need to have Employers’ liability insurance by law.
If you need to take out a mortgage to fund your self-build project, your mortgage provider may want you to take out self-build insurance before they let you borrow from them. This helps to protect the money they lend you for construction.
A structural warranty policy can help to cover the cost of any repair work and full or partial rebuilding that your self-build needs. This may be because of the house’s design, if any building work that didn’t meet the correct standards or there was a fault with the materials used. Your structural warranty policy can help to protect your self-build house for up to 10 years.
A mortgage lender may say you need a structural warranty in place before you can borrow, and a mortgage lender and solicitor will likely need a structural warranty for when you decide to sell the property you’ve built.
The level of public liability protection offered by your self-build insurance may cover your work site for any damage you or your workers cause to a third-party’s property - but it may not cover you for damage caused by events that are out of yours and your workers’ control (non-negligence).
Unfortunately, you will still be liable for any damage that’s caused to a third-party or their property if your building collapses because of the land sinking (subsidence), heaving or vibrating, the building weakening or something happening when you remove support and other events.
You’ll need non-negligence cover (JCT 21.2.1 insurance cover) to protect you against any claims for events that are out of your and your workers’ control.
Renovation and conversion home insurance
If you’re planning on renovating or converting your home (instead of building the house from the ground up), you may still need to take out a non-standard home insurance policy. This is because most home insurance policies won’t offer cover for Employers’ liability and Public liability for the works period.
The value of your home and the contents there will also be different if you include the value of building tools and equipment.
Non-standard home insurance policies can cover renovation work (including extensions and loft conversions), so long as the entire house isn’t being built from the ground up.
Will your contractors’ insurance cover your self-build?
The contract workers you employ for your self-build may have some level of cover for the work they’re carrying out, but the liability cover they have will most likely only apply while they’re on-site. If anything happens out of work hours, you will be liable. Their insurance may not cover any tools or materials you buy either.
Things to keep in mind…
There are a few things to keep in mind when you’re looking for insurance for your self-build home:
- You’ll still need to keep the site safe and secure to make sure any theft, damage or vandalism claims you make will be covered
- You’ll need a buildings insurance policy in place to protect your home once it’s been built
Insuring your self-build once it’s complete
Standard construction buildings can be covered by a standard home insurance policy – although you may need to show that the house has been signed off by a builder and the correct planning permission was secured.
Non-standard construction self-builds (that have a thatched or flat roof, for example) will need a non-standard home insurance policy to make sure they’re properly covered.