What is builders insurance and why do you need it?

This blog will outline what builders insurance covers, including public liability, employer’s liability, and tools cover. It will explain who typically needs it, such as contractors and tradespeople, and why it’s essential for protecting against risks and safeguarding projects.

Builders insurance is a type of business and liability insurance for tradesman and builders. It can cover you for most types of building work including:

• Building new or repairing old private and commercial properties

• Surveying and visiting properties for quotes

• Public contracts

• General building jobs

• Building work you undertake abroad

• Other tradesman work like gardening or plumbing if you need it

Builders liability insurance is a package of policies specific to the builders trade. It will likely include:

• Public liability

• Product liability

• Employers liability

Optional covers include:

• Builder's tools insurance cover - 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 completed

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.

Public liability insurance covers claims arising from accidental injury or property damage to third parties, including members of the public, customers or clients.

Whatever type of work you are doing, from building a wall to an extension, you should ensure you have sufficient builders public liability cover in place.

There is also a range of specialist builders insurance covers which can be included in policies. These include joint contracts tribunal (JCT) insurance; non-negligence insurance; contractors’ all-risks (CAR) cover; cover for your own plant; hired-in plant insurance; and contract works cover.

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

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.

Within the overall policy, a limit on tools will tend to be applied per person and per single item, which will be shown in the insurance policy schedule. Security requirements and overnight restrictions or exclusion clauses can apply to unattended tools left in your vehicle overnight – please make sure you check your policy documents for details.

Business equipment insurance provides cover for damage or loss to property or equipment that is used during business.

Business stock insurance covers the cost of repairing or replacing your stock if any of it gets stolen or accidentally damaged.

A limit for a single item will apply - check your policy documents or talk to your insurance adviser for details.

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

This excludes contracts where the estimated contract price is higher than the limit in the policy schedule. There is sometimes also a restriction on the length of the contract – please check with your adviser and check your policy schedule to confirm.

Cover will be subject to the limits confirmed in your policy schedule. Please check with your insurance advisor for details. It is important to read your policy document for limitations, exclusions or policy conditions.

Builders face many risks in their line of work. Unfortunately, no matter how well prepared you are, mistakes can happen – and a single slip could be disastrous for you and your business, arising from personal injuries caused to visitors on site or to the general public in the vicinity of the site.

Legal action, for the consequences of third-party personal injury or property damage from your activities is a real threat. Protect yourself, your business and clients with a flexible public liability insurance policy tailored to match your requirements.

It is a good idea to talk to a specialist broker who not only understands the risk you face in your industry, but also understands the risks you personally face.

If you want to build a solid foundation for your business, talk to the experts at Towergate about builders liability 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 third-party property damage.