As a builder, there’s always a risk of accidents and damage when you’re on a site. But as a customer-facing business that provides a service to the public, you’ll also need to be covered for public and product liability should your products or services cause an injury or damage someone’s property. This is where builder’s insurance comes in.

Builder’s insurance coverage

Builders usually take out one or all of these types of cover if they run their own business:

• Public liability insurance – This covers you in case your product or service causes injury or damage to a customer or someone who isn’t an employee.
• Employers’ liability insurance – Covers you if an employee becomes ill or injured while working. This is a legal requirement if you employ one or more people.
• Owned plant insurance – Protects you against the risks of running an owned on-site plant, such as cement mixers, generators, trailers etc. This includes theft, loss or damage.
• Hired-in plant insurance – Protects you against the risks of running a hired on-site plant, such as cement mixers, generators, trailers etc. This includes theft, loss or damage.
• Contract works insurance – Covers you in the event of your work being damaged by fire, floods or vandalism.
• Business contents insurance – Covers any business equipment and tools you have against theft, fire or damage. Check your provider to see if this covers perishable stock such as food and ingredients.
• Legal expenses insurance – In case you need to pay legal costs associated with your business.
• Motor insurance – If you use a van or any other vehicle to travel to jobs and transport tools, you’ll need to have motor insurance in order to drive or park it in a public place.
• Personal accident insurance – This protects you (or anyone you name in the policy) in the case of an accident, and covers you both in and out of working hours.

How could builder’s insurance protect your business?

Here are a few scenarios where having builder’s insurance coverage could come in handy:

• An inspector visits the site and suffers an injury
• Problems are discovered after a project is completed which require more work
• Your cement mixer breaks down, requiring expensive maintenance

Choosing a builder’s  insurance policy

When choosing builder’s insurance policies, it’s good to ask yourself:

• What types of workers do I employ?  You’ll need to have employers’ liability insurance no matter the type of employees you have, including full/part time, contractors or permanent staff.
• Can I cover my expensive tools and leave the rest? You’ll need to cover the total cost of all your tools and equipment, otherwise you might only get a portion of your claim paid out.
• Which liability cover limit should I choose?  Make sure you take into consideration the maximum amount your business could lose in terms of public liability and choose a policy that reflects it.

FAQs

• What types of business insurance are mandatory? Employers’ liability insurance is the only type of business insurance you’re legally mandated to have, which is applicable no matter how many employees you have. However, as a business that provides a service to the public, it’s strongly recommended to have public liability insurance to go alongside this.
• Should I get standalone policies or a bundled insurance package? This will depend on the types of insurance you need for your business. Insurance bundles can be helpful in getting the full coverage and can often be tailored to your needs. However, if you’re already covered for one aspect of your business, you might only need a standalone policy. Always compare policies to make sure you’re getting the best value.
• What information do I need to apply for a policy? – When applying to for business insurance, you’ll need to provide some basic information about your business. This often includes:
  • your name
  • your address
  • the size of your business
  • your annual turnover
  • how many employees you have
  • any previous claims made against your business

Further reading

Business insurance: Everything you need to know – Insurance offers vital protection from the crippling costs of a claim against your business. But which insurance do you actually need and which is merely optional?

What business insurance do I need as a sole trader? – What are the main types of insurance sole traders should consider.

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