Essential insurance a builder must have

ey143 · 3 Jul 2015

As a home owner, I want to check what insurance my builder has in place before starting remodelling work of my house.

Is public and employers liability enough to cover me if the worst was to happen eg a fire or total destruction of the house due to incompetence etc?

I understand buildings insurance is unlikely to cover such incidents and in fact endorsements will be placed on the policy when I inform them.

ey143 · 3 Jul 2015

Just to add, I read somewhere that a builder should also have contract insurance but some confusion arises because this seems to cover the workmans tools or the extension to be built.

If eg a plumber scratches an expensive door accidentally whilst fitting a boiler, I guess his public liability insurance will cover it. Surely if a roof or house collapses, wouldn't this also be covered by the same insurance?

Tipper · 3 Jul 2015

You'll need to tell your own insurer too that the builders are in! (Just in case it falls down or catches fire whilst work is ongoing)

jeds · 3 Jul 2015

As a minimum the builder should have public liability insurance. Buildings insurance depends on the situation. If you already have it then you can inform your insurer that remodelling works are happening and ask them to cover both you AND the builder in joint names for the duration of the works. Or, if you are moving out and handing possession of the property to the builders for the duration of the works, you could ask them to arrange buildings insurance in joint names. It doesn't matter who does it as long as one of you does. If you do it you pay - if they do it they charge you. But it MUST be in joint names and not conflict with any other building insurance - i.e. don't let them have an insurance and you have one as well.

The only other one you should consider is professional indemnity insurance. Anybody who provides design or professional advice on the works should hold PI insurance, so if the builder is designing as they go along they really should have it. But it does depend on the complexity of the works.

ey143 · 3 Jul 2015

Tipper - hi, yes already mentioned above about notifying own insurer but cover will be restricted and unlikely to cover building work.

Jeds- thx for feedback. I have buildings and contents with Towergate, one of a more premium whole of market risks cover so not the online one.

Due to the nature of the work, house will be unoccupied during the works.

The design has already been done by architect who is also a structural engineer, and he will have had PI.

Interesting point you make about making sure the insurance is in both names. I wasn't aware of this and not sure if my existing insurer will add the builders name to it. What purpose that serve.

Builder has sent me his public liability insurance certificate which also shows employers liability, but my original question hasn't really been answered in that will a worst case scenario house or roof collapse be covered by public liability or contract works insurance?

Thanks.

^woody^ · 3 Jul 2015

There is actually no requirement for the builder to have any insurance for the work, other than employee insurance for any direct labour.

It's no good having joint insurance either if the property is already insured under home risks (which it will most likely be) - you can't insure twice for the same thing, and all that happens is you pay two premiums unnecessarily.

You need to think about your expectations of what protection insurance actually offers. If any damage is alleged, then unless the builder actually admits liability, then you need to prove liability. For your roof collapse scenario, it may mean that you claim on your home insurance, and then your insurer pursues it. You would tend not to claim directly against a builder's insurance else it becomes a long protracted claim and you live with no roof for a long time.

jeds · 3 Jul 2015

ey143 said:
Interesting point you make about making sure the insurance is in both names. I wasn't aware of this and not sure if my existing insurer will add the builders name to it. What purpose that serve.

I don't know the extent of your works but if it is significant I strongly advise you not to rely on your house insurance. House insurance and insurance for building works are not the same thing. In the event of a claim the insurer will look for any way possible to avoid paying out. If they can lay blame on the contractor - which is highly possible - then they will use that to try and wriggle out. The simplest way around that is to include the builder on the policy. The cost is minimal so there really is no reason to take a risk. Just give them a call and check it out. If you don't need it, you don't need it. But get it in writing.

angelboy · 3 Jul 2015

https://www.ukinsurancenet.com/unoccupied-insurance/extension-insurance/

^woody^ · 3 Jul 2015

jeds said:
In the event of a claim the insurer will look for any way possible to avoid paying out. If they can lay blame on the contractor - which is highly possible - then they will use that to try and wiggle out.

The insurer can't wiggle out and blame the contractor to avoid paying. If the damage is due to an insured risk then the insurer pays. They may well blame a third party and pursue them for damages, but no insurer can avoid paying just by blaming anyone else.

Most home policies are all risk cover. Unless damage due to building work is specifically excluded, then it's covered.

bernardgreen · 3 Jul 2015

^woody^ said:
Most home policies are all risk cover. Unless damage due to building work is specifically excluded, then it's covered.

The only way to be sure is to talk to your insurance company about what conditions will be imposed on you by them during the building work. Where the house and contents are to remain fully insured during the building work you insurance company would normally require you to convince them ( and yourself ) that the builder was insured for any damage or injury that he or she caused to happen to the insured property.

Read the entire small print. Exclusions are spread through the many section of the policy documents.

^woody^ · 3 Jul 2015

bernardgreen said:
The only way to be sure is to talk to your insurance company about what conditions will be imposed on you by them during the building work.

They can't impose anything. Any conditions will be there already in the policy schedule, and these can't be changed, or new ones added. It's a contract.

Yes, check the schedule to see what's covered and if certain things need to be done as part of the conditions.

bernardgreen · 3 Jul 2015

It's a contract. For a house with a certain number of rooms. If you add a room then the contract can be considered as void as you have changed the conditions.

^woody^ · 3 Jul 2015

bernardgreen said:
It's a contract. For a house with a certain number of rooms. If you add a room then the contract can be considered as void as you have changed the conditions.

Not until the room is complete, and available for use do the risks associated with its use affect the policy.

bernardgreen · 4 Jul 2015

^woody^ said:
Not until the room is complete, and available for use do the risks associated with its use affect the policy.

Rebuild cost will have changed as soon as work begins.
No use listening to a conversation on a forum, to get the correct advice Speak to the insurance company

bernardgreen · 4 Jul 2015

The OP question was based on what insurance the builder should have

first post said:
As a home owner, I want to check what insurance my builder has in place before starting remodelling work of my house.

Sensible to find out. If something goes wrong and you have to pay out to recover the situation then it would be good to know the builder can repay you ( or your insurance company ) for all costs of recovering the situation.

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Essential insurance a builder must have

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