Building and construction are dangerous trades that can easily end up in expensive legal claims for damage to property or serious accidental injuries.
The risks are high but the cover is relatively cheap and gives employers and their customers peace of mind.
For builders just starting out, here’s an explanation of some of the most common insurance terms and the cover they can offer:
- Employer’s liability – Insurance any employer must have by law to protect against claims for damage to property or equipment and serious injury, sickness or death. Employer’s liability will settle claims and pay legal expenses.
- Public liability – Essential as builders inevitably work on other people’s premises. This insurance works the same as employer’s liability cover for people who do not work for you.
Both liability insurances generally come as a combined package. Businesses that only employ family are exempt from employer liability cover – providing they are run as a sole trader or partnership. All limited companies should have employer’s liability insurance.
Liability cover does not include vehicles, so if you have vans, lorries or cars to ferry people and materials about, look at a separate business motor insurance policy.
Other common insurances for builders cover tools, stock and subcontractors.
- Subcontractors – The rule is if their work is supervised by you, your insurance covers them, but if they are self-employed and supervise their own work, they need their own insurance.
- Plant and tools – Often a big investment for builders, plant and tools are covered by insurance but are subject to strict rules about where they are kept overnight. If you bring in plant for one-off jobs, discuss the insurance issues with the hire company.
- Stock – Cover for building materials kept in a yard or on site
- Goods in transit – If you collect and deliver building materials for customers, you need extra cover in case they are damaged or stolen en route
Depending on how your business is set up, like you may work from home or a yard, you will need to look at buildings and contents cover.
Home offices are not covered under standard home insurance, so tell your insurer about your business or risk having your cover cancelled if you make a claim.
However you work, the right builders insurance customised to match the way you work will give your business a firm foundation.