Your complete guide to insurance for builders

Due to its apparent complex nature, insurance for builders can seem a bit bewildering at times. That’s why we’ve made this detailed guide on the subject. Find out everything you need to know about builders’ insurance with Checkatrade.

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Is insurance for builders essential?

Whether you like it or not, insurance is one of those things that is essential for any business to have. For one thing, it will safeguard you, your employees, and your finances from harm.

On top of that, it proves to your customers that you’re a responsible tradesperson who takes their job seriously.

But builders in particular need to be acutely aware of the type of insurance they need to invest in. Builders are exposed to more hazards than most, and you have a duty of care towards those around your site.

Simply put, without the right insurance, you won’t be protected from legal repercussions. This means you’ll have to shoulder the financial burden should an employee or third party make a claim against you.

So, yes, insurance for builders is absolutely essential!

What insurance should a builder have?

As with all trades, there are a variety of builders’ insurance policies you should be aware of. These offer a range of cover options that you choose between to match the needs of your business.

However, there are certain types of insurance that you must legally have as a builder before you start operating.

Specifically**, you are legally obliged to have employers' liability insurance** if you employ others. This includes both full-time employees and labour-only subcontractors on a short-term basis. (Bona fide subcontractors should have their own insurance).

If you don’t have employers’ liability insurance, then you can expect to pay a fine of £2,500 per day. This will continue until you’re properly insured. You could also be charged an extra £1,000 for failing to display your employers' liability certificate to inspectors upon request.

What insurance do builders need besides employers’ liability?

As we just mentioned, there is a wide variety of cover you might want to consider as a builder. For the most part, it's a good idea to invest in all of them, if possible, as many will help your business thrive.

Below are the basic forms of cover to look for when it comes to insurance for builders:

• Public liability insurance – this will cover you against any associated legal costs if a member of the public is injured by your work

• Tools insurance – this will protect your tools and equipment in the event they are damaged or stolen

• Personal accident insurance – this will cover you against any injuries you suffer on-site that prevent you from working

• Professional indemnity insurance – this will protect you against legal costs associated with a customer claiming that your work was not up to standard

Besides these options, there is also a range of other cover options you can add to your policy. These can include, but are not limited to:

• Builders risk insurance

• Contract works insurance

• Business interruption insurance

• Business van insurance

• Commercial property and contents insurance

• Product liability insurance

• Goods in Transit insurance

• Legal expenses cover

Naturally, there’s a lot to cover here, so it's wise to speak with an insurance broker for further help.

Why do you need builders' public liability insurance?

Like employers’ liability insurance, builders’ liability insurance should form a core part of your insurance policy. Although not a legal requirement, it will cover you in case a third party is injured on-site.

In most cases, public liability is a must for the following scenarios:

• Builders’ liability insurance is required by most trade associations

• It will most likely be asked for if you plan to work as a contractor for reputable firms

• Local authorities will generally ask for a minimum cover level of £5m before you can work for them

What does builders' public liability insurance cover?

Public liability insurance is the part of your insurance policy that shields your business against the cost of associated claims. This could be on-site, in a public place, or back in the office, including any of the below examples:

• If one of your team scratches a customer's car while carrying some materials past, your business will be liable for the cost of repairs

• If a member of the public injures themselves tripping over an extension cable you've run across the pavement, your public liability insurance will cushion you from any associated medical or legal costs

• If part of your scaffolding falls down and injures a fellow tradesperson working on the same site as your team, you would be liable to cover the cost of a claim made against you for losses, personal injury, medical fees, legal fees, and compensation

These are just some examples, but you can no doubt already see the value of having public liability insurance.

How much does insurance for builders cost?

Due to the differing nature of business insurance requirements, there is no set cost for builders' insurance. How much you’ll need to pay will depend on a number of factors. This could include any of the following:

• The level of cover you require

• Any additional cover features you want

• The amount of work you’re doing

• The estimated length of time for the project

• Whether or not you employ others

• The location of your work

• Whether or not you’ve had to make insurance claims in the past

Therefore, if you want the best price for your policy, it’s a good idea to compare a variety of quotes. That way, you can choose the right deal for your business.

Save money on your builders' insurance as a Checkatrade member

With all that information covered, you should now have all the information you need to get builders’ insurance. But did you know you can get a discount on your insurance costs as a Checkatrade member?

By joining up, you get more than a listing in the UK's leading trade directory. You can also save up to 20% off the cost off public liability insurance, as well as great savings on other cover too!

Just log in to our Member's Area and see what are the latest deals we have on! As a Checkatrade member, you could be saving today!

Builders’ insurance FAQs

Do you need builders risk insurance for renovations?

It is advised to get builders' risk insurance for renovations. Specifically, you want cover that includes Contractors All Risks cover and Contract Works cover.

If a contractor damages a property during renovation, the homeowner will not be covered by their building insurance policy. Therefore, you want to make sure you and your team can cover any damages.

Builders’ liability insurance: what does it cover?

As we highlighted earlier, builder’s liability insurance is just another term for public liability insurance. This means it covers all areas associated with this form of insurance and claims made against you by a third party.