Having adequate insurance cover to meet your legal liabilities as well as potential risks such as claims for negligence or contractual disputes is vital for building contractors.
Contract Works Insurance
Contract works insurance, also known as Contractors All Risk Insurance, is specifically designed for building contractors and most other trades working at a contract site.
If there’s a fire on site before handover of the contract, say, then you could be liable not just for the cost of redoing the work but also for replacing materials, plant, tools, and huts.
Extensions, new builds and loft conversions under construction can’t be covered under a building insurance until completion, whereas contract works insurance can cover you for loss or damage to temporary and permanent construction works, plus materials, plant and tools on and off site.
Employees and Subcontractors
Building contractors with more than 10 manual workers can’t usually buy insurance instantly online as insurers often want to know more about your activities and trades involved.
You generally need to fill in a form online and the sales people will call you back for more information.
If you hire in labour only workers, i.e., workers who work under your supervision using your tools and materials to complete parts of the job - plasterers or painters, say - you'll need employers liability cover for them as well as public liability insurance.
You don't need employers liability cover for bona fide subcontractors working under their own steam and using their own tools and materials, but you must check they've got adequate insurance cover of their own.
Public and Product Liability Insurance
Contractors All Risk Insurance can include public and product liability cover to protect your business against accidents to members of the public or damage to property as well as claims arising from defective materials.
A contract solely for demolition and stripout works will not usually be covered under a general building contractors insurance policy.
Demolition tends to be permitted only if it's part of a rebuilding contract. Even then some insurers ban the use of demolition plant and specify height restrictions, eg, 8 metres.
Work must stop immediately on site if asbestos is discovered and specialist contractors called in. Contractors all risk insurance can help meet the additional expenses and costs incurred by delays to the contract.
Federation of Master Builders
The Federation of Master Builders (FMB) is the biggest trade association in the UK construction industry.
Non profit making, it represents small and medium-sized building firms and offers professional advice and support to members.
To be eligible to join, you must have traded for at least a year and have public and employer liability insurance.
Members get 10% discount on commercial insurance cover through the FMB’s own insurance broker, Build Assure Services.
Cover includes public and employers’ liability, contract works, tools of trade, personal accident and temporary workers.