What happens if you don’t have builders insurance?

If you work in construction, insurance might not always feel like a top priority. However without it, you could be putting your finances, your reputation and even your livelihood at serious risk.

Builders insurance helps protect your business against risks such as third-party injury, property damage, or theft of your own tools. Employers’ liability is a legal requirement if you employ staff, while covers like public liability or contract works may also be important depending on your projects.

In this guide, we’ll explain what could happen if you do not have builders insurance, including the legal, financial and reputational risks. We’ll talk about when cover is essential, what it typically includes and how to stay compliant, protected and in control.

In the UK, builders insurance isn’t always required by law but certain covers may be required by your customer as part of the contract.

Employers’ liability insurance is a legal requirement if you employ anyone, even part-time, temporary or subcontracted workers. It protects you if an employee is accidentally injured or becomes ill as a result of working for you (for which you are responsible). Without it, you could face prosecution for breach of compulsory insurance regulations and fines of up to £2,500 for every day you’re not insured.

Public liability insurance, while not a legal requirement, is strongly recommended for anyone working in construction. It provides protection if a member of the public is accidentally injured or their property is damaged as a result of your work. Many clients and contractors may refuse to work with you unless you have this cover.

Other types of builders insurance, like tools cover or contract works insurance, are optional but can be vital in protecting your business from certain risks on site.

Although not all types of insurance are legally required, operating without adequate cover could leave you financially vulnerable.

Builders insurance isn’t just for large firms. If you work in construction, builders insurance can help protect you from the risks that come with the job. Builders insurance is relevant for:

• Sole traders and partnerships - If you work for yourself, you’re personally liable for any accidents or damage caused by your work. Insurance can help shield your finances and reputation if something goes wrong.

• Subcontractors - Even if you’re hired by someone else, you may still be responsible for the consequences of your own work and loss or damage to your tools. Some contractors will require you to have your own insurance in place before letting you on site.

• Limited companies - If you run a business that employs others, employers’ liability insurance is legally required. You will also need to consider public liability and arrange cover for your tools and equipment.

Working without builders insurance can leave you open to serious consequences, some of which include:

Paying for injury or damage yourself

If someone is injured on your site or property is damaged because of your work, you could be held responsible. Without public liability insurance, you’d have to cover the legal fees yourself to defend the allegations and pay unlimited compensation, if you are found to be at fault.

Being sued by clients or members of the public

If you’re uninsured, a legal claim could cost you financially and also damage your reputation and relationships with clients.

Project delays or cancellations

Some clients or main contractors won’t let you start work without proof of insurance. Being uninsured could delay a project or mean losing a job altogether.

Loss of work due to lack of professionalism

Not having insurance can signal to clients that you’re not serious about your business or their protection. It could make your business less attractive when bidding for jobs, especially against fully insured contractors.

These risks are common issues in the construction industry, but they’re also avoidable. Having the right builders insurance in place can give you a financial safety net and demonstrates professionalism.

Builders insurance is a term that covers certain types of insurance products. Depending on the nature of work you do, you might need one or more of the following types of insurances:

Public liability insurance

Public liability insurance provides protection if a member of the public is accidentally injured or their property is damaged as a result of your work. For example, if a passer-by trips over your tools or debris which causes damage to a neighbour’s car, this cover can help with legal costs and compensation.

Employers’ liability insurance

Employers’ liability insurance is a legal requirement if you employ anyone, even on a temporary basis. It protects you if an employee is accidentally injured or becomes ill as a result of working for you )for which you are responsible).

Tools, equipment and materials cover

Tools, equipment and materials cover protects against theft, loss, or damage to tools and equipment stored on-site, in a van, or at home. Cover for items left overnight in a vehicle may be subject to specific terms and conditions, so it’s important to check your policy details.

Contract works insurance

Contract works insurance, also known as contractors’ all-risks cover, protects building work in progress. For example, it can cover damage caused by fire or flood to a partially built structure, or theft of materials before installation. Cover is subject to policy terms and conditions, so always check what is included and any exclusions.

Having adequate builders insurance is far more than a box-ticking exercise. It’s a vital part of protecting your business, your finances and your future. Take these three steps to help make sure you’re covered:

• Understand your legal duties - Check whether you’re legally required to hold certain types of insurance, like employers’ liability.

• Assess your risks - Think about the kind of work you do, where you do it and who’s involved. Are you working in public spaces? Do you use expensive tools? Are others relying on your work? These all increase your risk and shape the cover you need.

• Choose a specialist provider - Construction insurance can be complex. It helps to speak to a broker who understands insurance for builders and can tailor cover to your business.

At Everywhen, we’ve been supporting tradespeople and construction professionals for decades.

Builders insurance helps protect your business by paying legal costs for claims of accidental injury or damage to third-party property, as well as covering compensation and the cost of repairing or replacing damaged property.


Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.