A recent Property Developer Insurance policy we placed was for a development in Aberdeen. The property was purchased by the developer 2 years ago to renovate and sell. The property developer did the refurb and placed the property up for sale. Unfortunately the property was not selling, so she decided to take it off the market and apply for planning permission instead.
The planning permission was to turn the chalet style house into two flats. After a 12 month period she finally got the planning and thats when Construction Insure were contacted to advise on the relevant insurances she might need.
Property Conversion
Due to the property being converted into flats we asked the developer to check with her conveyancer that there was no restrictive covenant in place that could surface during after after the works had taken place. This was checked and in this instance all was ok. We then asked for an exact description of works that would be carried out. The works were to split the two floors, creating separate access for the two new flats ,but also to make use of a basement area that had been pretty much redundant. The basement was to be opened up by removing a 6 foot load bearing wall and replacing this with an RSJ which would then bring two rooms together creating a larger space.
The first policy that needed to be arranged was an unoccupied buildings insurance undergoing structural works. She already had an unoccupied property insurance in place, but this didn’t cover her for the works that she would be carrying out and if she had of kept it without notifying the insurers then her existing policy would have failed in the event of claim due to non disclosure.
We then drilled down into the developers works, what part they would be playing in the project, did they have any manual staff and what was their usage of bonafide and labour only sub contractors. With this development the developer was going to be project managing and the rest of the labour force were to be bonafide sub contractors who would all use their own insurances. As they didn’t have any immediate staff and all of the contractors fell outside of the rule that would make them employees of the developer no Employers Liability was needed and on this occasion just Public Liability would be adequate. For this property developers insurance there was also the need for a Contract Works insurance as there was no building contractor and they were undertaking a structural change, so to safeguard the project this was put in place.
A development like this might be small but there are still plenty of pit falls which is why at construction insure we like to go through everything thoroughly, give you professional advice and make sure you go into the project safeguarded.