Are you about to start a new construction project? Are you concerned about the possibility of accidents or damage to the building site? You may be wondering what happens if someone is injured while working on a loft conversion or how you can pay for damages in case of a fire.
To ensure that you have the necessary coverage and compensation, it’s essential to have the right insurance policy in place. In this post, you’ll discover the different types of insurance policies that most builders offer, and what each one is for.
Different Insurance Types for Builders
Both clients and builders should know the different types of insurance available. One of them is especially important because it’s a legal requirement. The other types are worth reading up on, especially if you’re about to start a big construction project.
Finding the right insurance for your project can help you pay for damages should something terrible happens.
Contract Works Insurance
Think of contract works insurance as risk insurance. A work site can get damaged by fire, flooding, or a storm while in the middle of construction. Contract works insurance will shoulder the costs of returning the site to where construction was before the tragedy.
Not only can this business insurance cover the repair cost, but it can also pay for building materials and equipment that are no longer usable.
Employers’ Liability Insurance
While exceptions exist, businesses must legally get employers’ liability insurance. It’s a legal requirement because it compensates your employees for work-related injuries, medical treatment, and legal costs.
Basically, workers that end up hurt or ill while on the job can file a claim and you may be liable to pay. For example, a worker falls off a scaffolding while making repairs. That person may be entitled to get compensated.
Full-time employees aren’t the only ones covered by employers’ liability insurance. In some cases, part-time workers, temporary workers, and even volunteers can make claims. You can seek professional advice if you want a full list of people covered by this type of insurance.
Insurance-Backed Guarantees
Insurance-backed guarantees protect clients from builders that cease trading. Let’s say a client needs damage caused by a construction worker you hired. If the damage was defective workmanship and the warranty period hasn’t expired, your company should fix the structure.
But what if your company folded for some reason, and the client can no longer work with you? What business insurance will the client need to get to file compensation claims? How will the client pay for replacement costs?
That’s what insurance-backed guarantees are for. If faults need fixing and the original contractors can no longer fulfil their building guarantees, this insurance business policy should help.
Professional Indemnity Insurance
A reputable builder that provides advice regarding its client’s project design should have professional indemnity insurance. If you’re a builder and you manage to give your client bad construction advice that leads to damage, you must pay for the repairs.
But you won’t have to pay out of pocket if you got this insurance policy.
For example, you recommended that your client use a type of roofing material that didn’t end up working as intended for whatever reason. This insurance policy covers the expenses needed for the building work repairs.
Public Liability Insurance
Public liability insurance covers medical and legal costs brought about by claims by the public against your business.
Say a client slips and falls while walking around the job site. That person can file a claim against you, so you’ll have to shoulder the costs. With public liability insurance, you’ll have financial protection against this situation.
Do note that this type of insurance only covers claims made by the public. You shouldn’t confuse public liability insurance with an employers’ liability insurance. The latter is what you’ll need to protect yourself against claims by your workers.
Tools and Equipment Insurance
You can secure builders’ insurance that’ll protect your tools and equipment. Should your tools and equipment go missing or get damaged while at work, your insurance company will reimburse you the value.
This is necessary for builders who have to leave equipment on the job site. Having no money to replace stolen tools will not only eat away at your profits but also cause current projects to grind to a halt. Getting insurance policies that cover equipment loss will help prevent that and other things from happening on-site.
You’ll also want this builder’s insurance if most of your crew are new to the construction industry. There’s no telling if they can handle your equipment just yet. They might end up damaging a couple of tools as they learn.
Frequently Asked Questions
Here are a few frequently asked questions about builder insurance policies.
How can I know whether my builder is insured?
It’s simple. Just ask the builder directly. Reputable builders will be more than happy to discuss all the types of insurance it has. Some will even have them listed on their websites.
If you want to confirm whether a builder has insurance, you can confirm with the company it used to provide the insurance.
What can I do if my builder won’t provide proof of insurance?
You can’t do anything but move on to another builder if you’re uncomfortable. There’s no reason why a builder wouldn’t want to show his proof of insurance. If he or she insists on now showing insurance policies, consider it a red flag and start looking for an alternative.
Does your home insurance provider need to know if you’re having work done on your property?
It’s highly recommended that people inform their home insurance providers that they have work done on their properties. That’s because certain restrictions could be added to your policy that’ll cause fees to go higher.
Not informing a home insurance provider can lead to policies getting invalidated.
Don’t be afraid to ask your builder about their insurance policies. There’s nothing wrong with wanting reassurance. At the very least, a builder should have employers’ liability insurance since it’s a legal requirement for businesses with at least one employee.
Not having any insurance policy at all should be a red flag. Steer clear of builders that cannot provide any proof.