Every week without fail we are speaking to builders who are under insured. When speaking to them about building contractorsinsurance it is becoming more and more apparent that building contractors think that public liability is enough to cover them.
The issue is there are different types of building works that building contractors carry out, so let’s break it down into 2 different sections.
Public and employer’s liability Insurance
This covers a building contractor for any damage to third party property i.e. if whilst working on a client’s existing structure and the building contractor accidentally goes through a pipe, bursts it and floods the house, this is third party damage.
But let’s say the building contractor was working on a new extension/loft conversion/new build for a client/property developer. The building contractor is doing some welding for some minor plumbing works and suddenly there is a fire and this burns down all the works for their new extension or new build. A public liability policy WOULD NOT cover the builder as the builder has not damaged any third-party property. Until the build is complete for this new part it is the responsibility of the building contractor.
So what Insurance for Building Contractors is needed when undertaking a build outside of the original property’s build or stamp.
Types of builders insurance
There are three types of insurance that a builder can source to protect himself and the client:
- A Contract Works Insurance: This will cover the cost of the contract and the contract length. (the contractor usually has a separate liability policy)
- A Contractors All Risk Insurance: This will cover the cost of the contract, the contract length and Own plant and any hired in plant. (the contractor usually has a separate liability policy)
- A Contractors Combined Insurance: This will cover the cost of the contract, the contract length, Own plant, any hired in plant and public and employer’s liability.
The fact is we never blame the building contractor for not having adequate insurance. This blame usually is transferred to their existing broker, who are handling insurance outside of their capacity and not asking the client the correct questions, or the building contactors insurance was taken out via a comparison site. To us taken out a comparison site policy is setting yourself up for under insurance. How can a computer possibly ask you about all the works you carry out and educate you on what insurances you do and don’t need? The answer to that now is they can’t, which gives us the result of so many insurances for building contractors not being sold correctly.