Builders liability insurance protects firms’ finances in the event of unexpected events such as injury or theft, which could otherwise be costly. Do you have a job in the construction industry? Learn everything there is to know about public liability insurance and other types of business insurance for builders.
What is Builders’ Liability Insurance?
Construction is a dangerous job, so you’ll want to safeguard yourself and the public in the event that something goes wrong. If someone files a claim against you, public liability insurance will cover your legal fees as well as any compensation you may be required to pay.
In the United Kingdom, public liability insurance is not a legal necessity for enterprises. However, if you don’t have it and someone files a claim against you, the consequences for you and your business could be disastrous.
Even if you have strict health and safety measures in place, accidents can occur. Public liability insurance can help safeguard your business from more than just financial consequences; it can also help you secure new contracts.
Potential customers may require public liability insurance, and some may refuse to use you for building work if you do not have it. Before you can tender for work, most local governments require a minimum level of coverage of £5 million.
Subcontractors that do not have public liability insurance risk losing valuable contracts to contractors who consider it a must-have and will not work with you until you have it.
Is Public Liability Insurance for Builders required?
While Public Liability Insurance is not legally required for builders, it is widely seen as important in the profession. Few (if any) public-sector organisations or large corporations would work with an uninsured builder, so failing to obtain cover puts you not only in financial danger but also at risk of losing lucrative employment.
What is the Cost of Builders Insurance?
The cost of Builders Public Liability Insurance is determined by a variety of criteria, including the nature and scale of the projects you do, as well as your particular preferences and requirements. Get a customised Builders Public Liability Insurance quotation immediately to find out how much your rates will be.
What will Builders Public Liability Insurance Cover?
If you cause bodily injury to customers or members of the public or damage their property, public liability insurance may cover any associated legal costs, medical expenses, or compensation, as well as the cost of any repairs.
As a builder, you’ll frequently be operating in close proximity to the public, on both public and private property, so if an accident occurs, it’s not only you and your staff who are in danger.
Here are a few examples of when public liability insurance could be quite useful:
- The scaffolding you’re working on collapses and injures a passerby, who decides to file a claim for compensation.
- When you’re tearing down a wall, some of the brickwork falls on and crushes a neighbouring parked car.
- Your work weakens a building’s structure, causing a ceiling or wall to collapse and injure people.
What Does a Builder’s Public Liability Insurance Policy not Cover?
This sort of cover is only for damage or harm to the general public or their property; you cannot make a claim for accidents or injuries that you or your staff sustain. And, if you do have employees, keep in mind that it is a legal necessity to carry an employer’s liability insurance. The consequences of failing to do so can be extremely severe.
Similarly, builders’ public liability insurance will not cover any damage to your own property or business premises, or to your own tools and equipment. You will need additional coverage for this.
Because public liability insurance coverage varies, you should always carefully read the policy terms to discover what you’re covered and what’s not.
What is the Purpose of having Builders Insurance?
In addition to balancing invoices, ordering supplies, and monitoring your accounts, you must sometimes deal with the unpleasant reality of an accident involving you or your employees while on the job. Applying for a customised builders liability insurance policy can make your life easier, as well as safer. It provides you with peace of mind and the confidence to continue working without fear of compensation claims biting you. Customers are also far more likely to hire an insured business because it demonstrates that the owner takes their work seriously and can be trusted.
Builders’ Public Liability Insurance
If you are responsible for the injury or death of a third person or damage to their property, builders’ public liability insurance can cover the cost of damages, compensation, legal fees, and medical bills. It can be useful in situations such as:
- If a brick falls and strikes a member of the public as they pass by your construction site, you will be held liable.
- If a section of scaffolding collapses and causes damage to a vehicle,
- Also, if there is a structural flaw that results in an injury or death,
Although public liability insurance is not legally required, it can be valuable to have because legal bills and compensation payments can have a significant impact on your business.
Furthermore, many potential clients may request that you obtain public liability insurance, or they may refuse to hire you.
Consider the size of your business when selecting how much public liability insurance to purchase. Coverage of between £1 million and £10 million is normally sufficient for small to medium-sized firms, while larger businesses may require more.
Remember that the more you buy, the higher your rates will be, although you could argue that being overinsured is safer than being underinsured.
Builders’ Employers’ Liability Insurance
Builders’ employers’ liability insurance is a legal necessity if your business employs employees. It protects you from any compensation payments that may emerge if an employee is hurt or becomes ill as a result of the work they undertake for you.
To keep your builders’ employers’ liability insurance valid, you must ensure that your organisation follows proper health and safety regulations; otherwise, you may be unable to submit a claim.
Aside from builders’ public and employers’ liability insurance, you may also wish to consider the following policies for your construction business’s protection:
- Financial loss: This can include any compensation you’d have to give to a third party that wasn’t the result of actual property damage or loss. It would cover you, for example, if you executed a project badly and your client lost business as a result.
Product liability insurance protects you against any costs incurred as a result of bodily harm or property damage caused by a product you supply or make.
- Legal expenses: Legal expense coverage can assist you in paying for legal fees associated with employment disputes, property disputes, and tax investigations.
- Accidental death: An accidental death policy pays out a lump sum if you or a coworker dies as a result of an unforeseeable incident.
- Tools and equipment: This will cover you against the expense of replacing any tools or equipment you use as part of your job if they are damaged or stolen.
A business contents policy protects the assets you require for your business, including office furniture, computers, and phosystems,ems if they are damaged or stolen.
Read Also: Tool Insurance: Tools & Equipment Insurance
- Professional indemnity: This protects you if your construction business is held liable for professional negligence, which is especially crucial if your business provides specialised services.
Personal injury coverage provides a lump sum payment if you or an employee is unable to work permanently as a result of a workplace accident.
Before purchasing insurance, read any policy documentation so that you are aware of the scope of your protection. Your insurer and the policy you choose will determine the level of coverage you receive.
Contractors’ and subcontractors’ business insurance for builders
If you’re a contractor and you supervise self-employed persons or small businesses that utilise your goods or equipment, your public liability insurance should cover them. However, if they labour unsupervised or use their own supplies and equipment, they must obtain their own insurance.
If you work as a subcontractor under supervision, your contractor’s policy should cover you, but if you work unsupervised, you’ll need your own insurance policy.
Is it necessary for me to have employers’ liability insurance?
Yes. Employers’ liability insurance is required by law.
Employers’ liability insurance isn’t in place? You might be fined £2,500 for each day you don’t have it (corrected March 2018).
What if you’re a self-employed contractor? If it’s just you, you might not need it. You will, though, if you bring in anyone else on a task. You’ll need employers’ liability insurance, whether they’re temporary employees, subcontractors, or even volunteers. The only exception is if they are close family members.
Builders must have full liability insurance.
Full liability insurance includes both public liability insurance and employers’ liability insurance. Finally, we’re all together! And you might want to consider this collaborative approach. When compared to purchasing separately, you may be able to save money.
Other types of cover that can be included in a builder’s insurance policy
Aside from liability insurance, you should double-check that the following are included in your policy:
#1. Professional liability insurance
This shields you from liability if a client believes you were careless. It usually covers any compensation or legal fees incurred as a result of such a claim.
#2. Tools Insurance
Your tools are really important for your work. Loss, theft, or damage to them might quickly lead to a decrease in revenue. That’s before we consider the cost of purchasing new equipment. If something goes wrong, tool insurance can help relieve the pain.
#3. Hired-in plants Insurance
Essentially the same as tool insurance, but it also covers you for hired equipment.
#4. Insuring your inventory
In addition to tools, you may want to consider acquiring cover for the supplies and materials you’ll need to finish a work.
#5. Insurance for business interruption
This insurance covers your expenses and lost income while you are unable to work. This could be due to illness, injury, or other factors beyond your control. Business interruption insurance can be especially useful for sole proprietors and self-employed builders.
#6. Engineers Insurance
Something for businesses that currently use enormous pieces of machinery. Engineering insurance can cover you if a project is delayed due to loss, damage, or a breakdown.
#7. Insurance for structures
That’s not a typo: structures insurance may be included in builders’ insurance. This covers your office in this case. If you work from home, your home insurance policy may not cover business activity. It’s a good idea to double-check.
This may all appear to be a bit much. However, while purchasing builders’ insurance, it is a good idea to examine all eventualities.
Tips for Getting Cheaper Builders Liability Insurance
Check to see if you are already insured by another policy; this is known as “dual coverage.”
Keep an eye out for excess, especially when it comes to tool insurance—can you afford to self-insure?
- Check that the cover provided is adequate to protect you and your business.
- Combining policies can reduce costs.
- Compare prices by shopping around.
Builders Liability Insurance FAQs
What happens if my builder doesn't have insurance?
It is most likely that it will be brought against your builder, but a builder who does not have insurance probably doesn’t have much to lose (or he would have insured it!). As a result, the construction company will fail or the builder will declare bankruptcy before the (full) claim is satisfied.
Can you check if a company has liability insurance?
The short answer is that, except by inquiring at the point of contact, there is no way to tell whether a company has insurance until you file a claim against them. However, the value of their coverage to you as a contractor cannot be overstated.
What does builders professional indemnity insurance cover?
The policy covers the contractor’s legal defence costs as well as any damages awarded in connection with alleged errors in the design or construction of a project, such as an incorrect design, a project that is not fit for purpose, or a contractor who fails to use the correct materials as specified in the specification.
