For any construction or renovation project, a significant step in the process is hiring a builder. It’s not a decision to take lightly. Even if you have received a word-of-mouth recommendation or a company has numerous positive online reviews, there are various points to consider.

One that’s often overlooked is the importance of their insurance.

Accidents, damages, unforeseen issues – they can arise at any time. They can also potentially leave you financially vulnerable. Ensuring your builder has the right insurance protects their business and shields you from unexpected costs and legal issues.

Why builder insurance is important

Make no mistake, business insurance is essential – for both you and the builder. It protects against financial losses caused by accidents, property damage, or mistakes during a project. As an example, public liability insurance covers claims if an injury occurs on-site, while professional indemnity protects against design or planning errors.

Without proper coverage, you may face unexpected expenses or legal disputes. When your builder is suitably insured, it provides financial protection and helps ensure compliance with regulations. It also supports the smooth progression of your construction project - even when unforeseen challenges arise.

Our checklist

When you’re wondering, ‘What insurance should my builder have’, UK businesses should have multiple types of coverage. The main types of builders insurance to look out for are listed below:

• Public liability insurance: If a builder’s work causes injury or property damage, public liability insurance is imperative for covering claims. Say a passer-by trips over tools left on-site, or a property is accidentally damaged during construction. This policy covers legal fees and compensation costs. Without this insurance, however, the builder would be personally liable for such claims. Public liability coverage offers reassurance to both clients and builders, where both parties are protected from unforeseen incidents.
• Employers’ liability insurance: Employers’ liability insurance is a legal requirement for any builder in the UK that employs staff. This applies even if they’re only hired on a part-time or temporary basis. It protects the builder against claims if an employee suffers an injury or illness while working. This could be a fall from scaffolding, for example, or handling hazardous materials. Without this insurance, builders face hefty fines – as well as the financial burden of handling claims themselves. Employers’ liability insurance not only protects employees and their finances but it demonstrates the builder’s commitment to a safe, secure working environment.
• Professional indemnity insurance: Professional indemnity insurance is necessary as it covers mistakes in design, planning, or advice that result in financial losses for clients. Say a builder’s error in project drawings causes costly delays or structural issues. This policy covers legal fees and compensation claims, which in turn keeps their reputation – and most importantly from your point of view, financial stability – intact.
• Tools and equipment insurance: This insurance type, as the name suggests, protects against the theft, loss, or damage of essential building equipment like power tools and machinery. This policy covers repair or replacement costs. As builders rely on their equipment daily, this cover is essential to minimise downtime and keep your project on track.
• Contract works insurance: Unexpected events like fire, vandalism, and extreme weather have the potential to cause significant damage to ongoing construction projects. Contract works insurance covers against these types of events, alleviating the cost of repairing or redoing damaged work. Along with preventing delays, it stops any additional strain being placed on you and your builder.
• Insurance-backed cover: This type of protection supports you if a builder’s work is faulty or incomplete and they’re no longer in business to put things right. It helps ensure you’re not left out of pocket if further building work is needed.

How to verify your builder’s insurance

Verifying your builder’s insurance is essential. Fortunately, it is a straightforward process. Start by requesting a copy of their insurance certificate. This should outline the policies they hold and their coverage limits. Pay attention to see if the policy is active and covers the duration of your project. Check the specifics match up with the scope of your work.

For added assurance, you can contact the insurer directly to confirm the policy details. These steps may seem bothersome, but they can be the difference in avoiding financial and legal risks during your building project.