A guide to insurance for builders, including self-employed builders
Looking for info on insurance for builders? We’ll give you the foundations of what to look out for…
- You can be fined £2,500 for every day you don’t have employers’ liability insurance
- Public liability insurance is not compulsory - but many clients insist on it
- Builders' insurance is specialist business insurance
Whether you're a Fix-It Felix or a Wreck-It Ralph, builders' insurance could be just what you need. Cement your business’ future with a sturdy insurance policy. Not sure what you need? Here’s GoCompare’s floorplan to builders' insurance…
Why do I need builders' insurance?
Builders insurance' is a specific type of business insurance. It’s there to help you in case something goes wrong on a job, a site or back at the office.
And while business insurance may seem like it covers everything you need, there may be gaps in it for a building company. Tools insurance, protection if a project is late, and professional indemnity cover can be useful parts of insurance for builders.
Do I need builders' public liability insurance?
Public liability insurance isn't required by law. Yet it can be essential. Some clients even require it before working with you. Many companies advertise that they have builders’ public liability insurance.
Did you know...?
At 40 feet tall, the Newby-McMahon Building in Wichita Falls, Texas is the world’s littlest skyscraper
It can protect your business if it has any contact with a third party, such a member of the public. Public liability is there to cover any legal expenses that result from a claim against you. It can also help with any compensation you may need to pay.
Want an example? Say if someone was hurt if a tool fell off some scaffolding and it caused an injury. Or if some brickwork fell and damaged a nearby car. Then you might be liable, but public liability insurance can help.
Do I need employers’ liability insurance?
Yes. Employers’ liability insurance is a legal requirement.
Don’t have employers’ liability insurance? You could face a £2,500 fine for every day you don’t have it (correct March 2018).
What if you’re a self-employed builder? You may not need it if it’s only you. But you will if you bring anyone else in on a job. It doesn’t matter if they’re not permanent members of staff, subcontractors or even volunteers - you’ll need employers’ liability insurance. The only possible exception is if they’re close family.
The Health & Safety Executive has a great explanation of employers’ liability insurance here (PDF).†
Full liability insurance for builders
Full liability insurance is public liability insurance and employers’ liability insurance. Together at last! And you might want to think about this joint approach. You could make savings compared to buying separately.
Other types of cover that can be part of builders' insurance…
Aside from liability insurance you might want to check the following is in your policy:
This protects you if a client believes you've been negligent. It usually covers any compensation or legal fees resulting from such a claim.
Your tools are pretty essential to your work. Loss, theft or damage to them could easily result in a drop in income. That's before we factor in the cost of buying new equipment. Tool insurance can help ease the pain if something goes wrong.
Hired-in plant insurance
Pretty much the same as tool insurance, but covers you for equipment that you hire.
Insuring your stock
As well as tools, you might want to consider getting cover for the supplies and materials you need to complete a job.
Business interruption insurance
This insurance covers your costs and loss of income while you're unable to operate. This can be down to illness, injury or other issues outside your control. Business interruption insurance may be particularly handy for sole-traders and self-employed builders.
Something for companies that use large pieces of machinery now. If loss, damage, or a breakdown delays a project, then engineering insurance can cover you for that.
- Small business insurance
- Goods in transit insurance
That’s not a typo - buildings insurance might be part of builders' insurance. In this case this covers your office. If your office is at home, your home insurance may not cover business activity. It might be a good idea to check.
This may all sound a little bit like overkill. Yet it’s a good idea to consider all possibilities when buying builders' insurance.
Top tips for cheaper builders insurance
- Make sure you aren't already covered by another policy – sometimes called double cover
- Watch out for excess, especially with tool insurance - can you afford to self-insure?
- Check the cover offered is enough to protect you and your business
- Combining policies can bring down the cost
- Shop around and compare prices