Construction insurance is an overall name given to various types of insurance policies that provide coverage for property damage, third-party injuries or damage claims. But if you are new to building contractors insurance, or the construction industry in general, you are probably finding the world of construction insurance a tad confusing.

No doubt you are thinking…

“What insurance should my builder have? What is Construction Liability insurance? And who pays for the policy?”

To give you peace of mind and to make sure you don’t get lost in a minefield of acronyms, we have put together this quick guide to builders insurances in the UK. Helping you find out what insurance services you need and when you need it, this guide summarises the main types of insurance you need to be aware of for your development project. Read on to make sure you know your construction all risk insurance from your public liability cover and, of course, your structural warranty!

1. Public Liability Insurance

What is Public Liability insurance?
Public Liability (PL) insurance is a common type of business insurance that protects against liabilities for injury to third parties (non-employees) or their property.

Who needs Public Liability insurance?
If you work near other people and/or their property, which is basically anyone in construction, you should consider having PL insurance. This will ensure you are covered against any potential claims for damage to the person and/or their property. PL insurance should be renewed every 12 months.

2. Product Liability Insurance

What is Product Liability insurance?
Product Liability insurance protects against liability for injury to people or property arising from the
products you supply, manufacture or even import.

Who needs Product Liability insurance?
If you supply, manufacture, adapt or import any products used by other people then you should consider this cover.

3. Employer Liability Insurance

What is Employer Liability insurance?
Employer Liability (EL) insurance protects against liabilities to employers for injuries or illness.

Who needs Employer Liability insurance?
If you are an employer, EL insurance is compulsory. You may also want to look into EL insurance if you are building your own home. Injury to volunteers or sub-contractors could spark a claim against you as an ‘employer’.

4. Contractors All Risk Insurance

What is Contractor All Risk insurance?
Contractors All Risk (C.A.R.) insurance protects against physical damage to works and site materials that you were contracted to undertake. These types of losses are normally excluded under a regular Public Liability policy although they may be sold together.

How does Contractor All Risk insurance work?
If a contractor causes damage to a part of the property they were contracted to work on, standard PL insurance may not provide full coverage. However, a C.A.R policy would provide full coverage of the costs associated with rectifying the damage.

Who needs Contractors All Risk insurance work?
All employers and contractors working on construction projects.

5. Professional Indemnity Insurance

What is Professional Indemnity insurance?
Professional Indemnity insurance protects against claims for loss or damages arising from professional negligence or negligent advice.

Who needs Professional Indemnity insurance?
If you provide advice or hold design responsibility for a site then you should consider Professional Indemnity insurance.

6. Structural warranty

What is a structural warranty?
A structural warranty provides building owners with ten years of protection from ‘latent defects’ to the structure of a building. These are defects that occur during the build period but are not discovered until after completion. Structural warranties are usually bought by the builder or developer, but the warranty itself will provide cover for the person who purchases the completed building.

Who needs a structural warranty?
Anybody building or buying new buildings.

Find out more about the structural warranties LABC Warranty provides for new build residential and commercial buildings.

By Craig Ross

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