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You guide to construction insurance

Anyone who’s worked on them knows just how dangerous construction sites can be. This is why it’s so important to get the right construction insurance for your business. Find out the best way to do this with Checkatrade.

Do I need construction insurance?

Much like any trade, when it comes to the topic of needing insurance, the answer is pretty simple. It’s absolutely essential you get insurance for your business, especially construction insurance if you work in the building industry.

Working in construction is an incredibly rewarding job but it also comes with lots of risks. You’ll often be working with heavy machinery in challenging conditions with lots of different people around you.

If something goes wrong and someone makes a claim against you, you could be left with costly compensation to pay.

It doesn’t matter whether you’re a sole trader, run a limited company, or work as a sub-contractor. You need construction insurance to ensure both you and your business are protected in the event of an accident.

What does construction insurance cover?

Construction insurance is an umbrella term that refers to all the different types of insurance that can protect your business. It’s especially important to have to protect against common construction workplace hazards.

You can choose which kinds of insurance you need for your business, but we recommend investing in the following:

  • Public liability insurance – the most important insurance for you to consider, public liability insurance will protect you against claims in case of injury to a third party or their property
  • Tools insurance – sometimes referred to as plant and machinery insurance, this covers the tools and equipment you need to carry out your job in case of theft or damages.
  • Employers’ liability insurance – a legal requirement for anyone who employs other people, employers’ liability insurance provides cover in the event that one of your employees is injured at work.
  • Personal accident insurance – much like protecting your employees from injury, you want to protect yourself as well. This is where personal accident insurance comes in, which will cover you if an injury leaves you unable to work.
  • Professional indemnity insurance – while not necessary for all construction businesses, this will protect you from claims relating to professional mistakes or negligence.
  • Builder’s risk insurance – also known as Contractors All Risk insurance, or CAR, builders’ risk insurance protects you against physical damage to work and site materials that you’ve been contracted to provide

Of course, these are just the general details of these insurance areas. It’s best to speak to an insurance expert if you want more detail and information on each area.

Get the protection you need for less

Checkatrade members can get a 20% discount on public liability insurance

Find out more

Examples of what construction insurance can cover

While we’ve discussed what the overarching purpose of construction insurance is, it’s always helpful to have specific examples.

Below are just a few potential incidents you might encounter where construction insurance will be essential:

  • A member of the public trips over building materials you left on the pavement and injures themselves. Here, public liability insurance would cover your legal fees and pay the compensation required
  • A piece of hired equipment is lost under your care. Here, tool cover would provide you with the funds to replace said piece of equipment
  • Building materials off-site get vandalised. Here builders’ risk insurance would cover the cost of replacing them
  • An employee is injured by falling debris on-site. Here, employers’ liability insurance would handle the financial payments required for compensation and legal fees
  • An injury at work leaves you hospitalised. Here, personal accident insurance would ensure that you don’t lose any money as a result of your injury

Naturally, these are only a few clear-cut examples, but there are many other scenarios where insurance will be vital. Thus, you should not neglect purchasing it before you start operating.

Is it mandatory to have construction insurance?

In most cases, it’s not a legal requirement to have construction insurance. However, there are exceptions to this rule. The following are all occasions where construction insurance may be necessary for you to work:

  • When tendering for contracts, there is a good chance you will be asked to show specific insurance documentation
  • If you’re a sub-contractor, you’ll almost certainly need to have some form of public liability insurance to hand
  • If you’re a developer or the owner of the property you’re working on, you could struggle to sell the completed property without a structural warranty
  • If you have employees, employers’ liability insurance is a legal requirement
  • To become a Checkatrade member, you’ll need public liability insurance

As you can see, even if you don’t end up using your construction insurance, it’s a valuable tool to have. Not only will it make finding work easier, but it proves to customers that you run a responsible business.

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What is the overall cost of construction insurance?

As we touched on with builders’ insurance, the cost of construction insurance varies. Generally speaking, how much you pay will often come down to a range of factors, including but not limited to:

  • The type of cover you need
  • The type of work you do
  • Your turnover
  • Whether you need cover for employees
  • Where you work
  • Your claims history

So, if you want the best prices on your insurance policy, it’s best to compare a range of quotes. This will let you choose the best one for your business.

How to grow a construction business

Save money on your construction insurance as a Checkatrade member

With that out of the way, you should now be able to buy the right construction insurance for your business. And one way to save money in this area is to become a Checkatrade member.

Our members get exclusive discounts to help them run their business for less, including on insurance products. In fact, you can save 20% on your public liability insurance with your membership. Meaning you can get that all-important protection and peace of mind for less. Just log in to our Member’s Area and see what our latest deals are.

Reach out to the Checkatrade team today to learn more about signing up. And don’t forget that we have plenty of guides like this one on our trade blog.

We have pieces on growing your construction business, scaffolder insurance, and starting a construction management company.

Get the protection you need for less

Checkatrade members can get a 20% discount on public liability insurance

Find out more

Construction insurance FAQs

What is professional indemnity insurance in construction?

Professional indemnity insurance will cover you if you make professional mistakes or if you’re accused of negligence.

For instance, if you’re involved in the design of a build and you give incorrect advice that leads to issues down the line, you could face a claim against you.

Professional indemnity insurance in construction could help with your legal costs and pay any compensation due on your behalf.

Do I need subcontractor insurance?

Subcontractor insurance, like construction insurance, is an umbrella term for the kinds of insurance you’re likely to need as a subcontractor.

If you’re hiring subcontractors, you’ll generally want them to have their own insurance. That way you’re not left in the lurch if they make a mistake. Usually, the main insurance you would expect them to have is public liability insurance.

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