What insurance covers do builders need to protect their business?

Accidents can happen on any job. Find out what insurance you need as a builder to protect your business, including public liability, employer’s liability, and tools cover.

Insurance for builders can cover you for most types of work including:

• Building new or repairing old private and commercial properties

• Surveying visiting properties for quotes

• Public contracts

• General building jobs

• Building work you undertake abroad

The insurance you need as a builder will depend on a range of factors, including where you are working, and the amount of risk involved in the job.

It is a good idea to talk to a specialist insurer who not only understands the risk you face in your industry, but also knows how to calculate the risk you personally face. They can offer you a tailored builders insurance package that offers only the cover you need, so you don’t pay for anything else.

Some of the most common covers include:

• Public liability

• Employers liability

• Theft or damage cover for your tools

• Contact works - to cover on-going jobs from damage or prolongment

• JCT (non-negligence insurance) - to cover work already complete

If you have staff, employers' liability insurance is a legal requirement. It protects you from financial losses resulting from employee claims for injuries or illnesses sustained during work, covering compensation, damages, and legal costs.

If you employ contractors, you must be aware of the differences between types of contractor, and ensure your policy covers all workers that require it.

A contractor can be:

• Self-employed

• A worker or an employee (working for a client and employed by an agency)

There are two types of subcontractors, both with different requirements under employers' liability insurance.

A bona fide subcontractor should be working under his or her own direction, use his or her own tools and materials, have his or her own liability insurance and understand his or her legal liabilities. There is no need for employees of the bona fide subcontractor to be included in employers' liability or public liability premium calculations.

Labour-only subcontractors work fully under the direction of the contractor. They are provided the materials to work with; given detailed instructions of what to do, and then supervised; and must comply with health and safety arranged for them. Under UK law, if you use a labour-only subcontractor they count as your employee, and you as their employer take on the full risk of public, product and employers' liability.

Tool insurance is there to cover the cost of replacing or repairing equipment if it is damaged or lost, for example due to flooding, fire or theft. Note that if you are keeping tools and equipment overnight in a vehicle, it must be locked and in a secure location – talk to your insurer to confirm the specific conditions.

Contract works insurance is an insurance policy that protects work in progress on a construction or renovation project against accidental damage, loss, or destruction. 

JCT is a specialist insurance that covers an existing building structure and contract works while you as a builder are renovating the property.

If you want to build a solid foundation for your business, talk to the experts at Everywhen about builders’ insurance.

Builders’ public liability insurance covers legal costs for allegations of accidental personal injury or damage to third party property, cover to pay for third-party compensation and repairs to damage.