A home renovation should add value to your property, not wipe out your savings. For one Margate couple, a downstairs renovation that involved knocking through a wall and fitting a steel beam caused their home to collapse, leaving more than £50,000 of damage. The builder admitted liability, but its insurer refused to pay because of incorrect information on the policy, and the couple’s own home insurer turned them down because the cause was poor workmanship.
Stories like this are more common than most people think. Research from the Federation of Master Builders (FMB) found that 37% of adults in Britain have hired a builder who turned out to be unreliable or unqualified.
If your builder has no public liability insurance, they are still responsible for any damage they cause. The problem is that no insurer stands behind them. Whether you get your money back depends on your contract, your own home insurance and whether the builder can actually pay.
This guide explains who pays when things go wrong, where your own cover is likely to stop, and the practical steps you can take to recover your costs. It also covers the checks that stop the problem before work begins.
Does a Builder Legally Need Public Liability Insurance?
No UK law requires builders to hold public liability insurance. The only compulsory cover is employers’ liability, and that applies only if the builder employs staff or labour-only subcontractors who aren’t close family.
Many homeowners assume the rules are stricter than they are. In a 2025 survey, 45% of UK homeowners wrongly believed builders are licensed, and 65% wrongly expected builders to carry insurance for accidental damage.
The government has started to act, but the gap remains. Measures announced on 28 August 2026 include a voluntary Approved Code for home improvement businesses and support for a milestone payment platform called Trusted Payments. Even so, anyone in England can still trade as a builder with no qualification, no registration and no insurance requirement.
In practice, a sole trader can legally start taking down your kitchen wall tomorrow with no insurance in place. Because public liability is a market expectation rather than a legal duty, the only thing forcing your builder to hold it is you.
Who Pays When an Uninsured Builder Damages Your Home
Having no insurance does not remove legal responsibility. The builder is still liable for damage caused by careless or poor work. The real question is whether they have the money to put it right.
Damage to Your Own Property
Under the Consumer Rights Act 2015, every contract to supply a service includes a term that the trader must carry out the work with reasonable care and skill. If a builder cuts through a water pipe and floods your kitchen, or cracks your ceiling while removing a wall, that is likely to be a breach of contract.
When a builder has no public liability insurance, your claim is against the builder or their company directly. If something goes wrong, you could be left covering the costs yourself or chasing the builder for compensation, which can be a slow and difficult legal process.
Damage to a Neighbour’s Property
Building work often affects the house next door. In one case covered by The Sunday Times, builders removed coping stones from a boundary wall and badly fitted flashing against a neighbour’s house, letting rain in and bringing down ceilings in two rooms. The builders then stopped answering the neighbour’s calls.
A neighbour’s claim usually sits with the builder who caused the damage. As the person who hired them, though, you can easily get pulled into the dispute. That can strain relationships and bring legal letters to your door.
When Someone Is Injured on Site
Injuries are a separate risk. A builder without the employers’ liability cover they need can be fined up to £2,500 for every day they are uninsured, and the homeowner also risks being sued. Serious injury claims can run into large sums, so this check matters just as much as public liability.
Why Your Home Insurance May Not Step In
Many homeowners expect their own policy to act as a safety net. Often it doesn’t.
- Most home insurance policies exclude loss or damage caused by faulty workmanship or design, or by unsuitable materials.
- You need to tell your insurer before work begins, or you risk invalidating your cover.
- Most standard policies are unlikely to cover damage linked to structural changes such as an extension or loft conversion.
Financial Ombudsman decisions show how this plays out. In one case, a builder went into liquidation after mediation, leaving the homeowner with an unfinished project and damage to her home. Her insurer declined the claim, explaining that she would have been told about exclusions for builder damage if she had reported the works. In another, both a buildings claim and a legal expenses claim were turned down because the policy excluded claims linked to renovations and extensions.
The lesson is simple. Call your insurer before work starts. Ask what is excluded during the works and whether you need separate renovation cover.
How to Recover Costs From an Uninsured Builder
Getting your money back is possible, but it takes time and patience. Work through these steps in order.
Gather Evidence and Put It in Writing
- Photograph and film all damage, with dates.
- Keep your contract, quotes, invoices and messages.
- Get two or three independent repair quotes.
Next, write to the builder. Citizens Advice suggests referring to the Consumer Rights Act 2015, stating that reasonable care and skill was not used, and asking the builder to fix the problem. If they don’t respond, send a formal letter before action with a clear deadline.
Try Mediation First
Mediation is usually quicker and cheaper than court. In England and Wales, you will be offered a mediation service before a small claim goes further.
Make a Small Claim
A small claim is one worth no more than £10,000, not counting interest or costs. Court fees start at £35 for claims up to £300 and rise to £455 for claims between £5,000.01 and £10,000. You can make a claim online if you are claiming less than £10,000.
These rules apply in England and Wales. Laws differ between England, Wales, Scotland and Northern Ireland, so check the process where you live. You generally have six years from when the work was completed, or when you found the problem, to bring a claim.
Enforcing a Court Judgment
Winning is not the same as being paid. If you win, the court orders the builder to pay, and you can then use enforcement methods such as bailiffs or charging orders. A builder with no money or assets may still never pay, so weigh this up before spending on fees.
Checking Your Builder’s Insurance Before Work Starts
Prevention is far easier than recovery. Before any work begins:
- Ask for the insurance certificate before you sign anything. A genuine builder can send it within minutes, and reluctance is a warning sign.
- Check that the policy dates cover your build, and that the name on the certificate exactly matches the name on your quote and contract.
- Phone the insurer or broker named on the certificate to confirm the policy is live.
- Check the level of cover. £2m is widely treated as the minimum for domestic building work.
- Write an insurance requirement into your contract, because the law won’t do it for you.
- Pay in stages. The new Trusted Payments app is designed to release money at agreed project milestones, so builders can’t leave before the job is done.
Our builder insurance guide explains the main policy types in more detail.
Bigger projects need extra thought. Public liability covers damage to your existing property, but not the new extension if it burns down or floods. That needs contractors’ all risks cover. Property owners and developers can also arrange contingent liability cover, which responds when a contractor’s or builder’s insurance fails to pay out.
Protection Starts Before the First Brick Moves
When a builder has no public liability insurance, the law still holds them responsible, but it can’t make them pay if they have nothing to pay with. Your home insurance may exclude builder damage, and court action is slow and uncertain.
The scale of the problem is clear. A 2026 Citizens Advice report found that 28% of people who hired a trader for home repairs or improvements in the previous 18 months had a problem. Those who lost money lost a median of £750, and 11% lost more than £5,000.
The strongest protection comes before work starts:
- Verify the certificate and phone the insurer.
- Put insurance requirements into the contract.
- Tell your own insurer about the works.
- Pay in stages, not up front.
If you’re a builder or contractor and want cover that gives clients confidence, get a quote from Construction Insure. If you’re planning a renovation, our specialist team can help you find project cover that fills the gaps.
FAQs
Is it illegal for a builder to work without public liability insurance?
No. Only employers’ liability is compulsory, and only where the builder has employees.
Can I claim on my home insurance if my builder damaged my house?
Possibly, but many policies exclude damage caused by building works. Check your policy and tell your insurer before work starts.
Can I sue a builder who has no insurance?
Yes. The builder is still liable. Claims up to £10,000 can go through the small claims process in England and Wales.
How much public liability cover should my builder have?
£2m is a common benchmark for domestic jobs. Larger projects may need more.
How do I check a builder’s insurance is real?
Ask for the certificate, check the name and dates, and phone the insurer to confirm the policy is live.