Working in the construction industry presents daily risks to employees, passers-by and your business. Having the right level of insurance is critical in this line of work, to protect against any potential claims.
With this in mind, we’re here to guide you through the insurances available for your construction business, covering the types of insurance available and how important it is to ensure you get the right level of cover in place.
Providing insurance to contractors, tradesmen, builders and companies is what we do. We have worked with customers who have small and large businesses, providing policies to meet their unique needs, across a wide range of trades.
What is construction insurance?
Construction insurance is essentially made up of a range of insurance policies dependent on your business and the services or works you provide. Due to this, construction businesses and tradesmen can often find searching for the relevant insurance policy rather confusing.
This can also lead to contractors and companies not being insured with an inaccurate level of cover which leaves them open to claims and risks.
Taking out construction insurance provides cover to protect you, your employees and your business from potential liabilities. This can include accidents, injuries, damage to your property or equipment and claims against you.
Types of construction insurance
A comprehensive Contractors All Risks policy will incorporate public liability, employers liability, contract works, own plant and hired-in plant protection. Whilst Employers Liability insurance is the only legal requirement and Public Liability is standard, it is important the other insurances available are given serious consideration to ensure you are comprehensively insured.
Contractors All Risks insurance can be viewed as an umbrella type of insurance, covering a wide range of individual covers under one, to provide an extensive level of protection.
It’s important to understand and check what level of cover you receive, insurance providers can offer slightly different business insurance policies, some that are more comprehensive than others.
Employers liability insurance
If you have anyone working for you, and they are classed as an ‘employee’, you are required by law to take out employers liability insurance. It provides cover for any employees who are injured or become taken ill as a result of working for you.
Another tip here is to check who is, and isn’t, classed as an employee. Temporary or casual staff, volunteers and other contractors may be your responsibility, so it’s important that you understand the legal requirements and level of cover you need.
Public liability insurance
Public liability is probably one of the most important and common insurances businesses seek if they are dealing with customers and the general public. This covers you against anyone outside of your business (general public) being injured or their property being damaged because of any work you or your business has carried out.
Contract Works, tools, equipment and machinery insurance
Taking out insurance for your tools, equipment and machinery is commonly forgotten about and often under protected across the industry. Understanding what tools and equipment you own and the value of these is important to ensure you get the cover you need. You need to insure these whether they are at your own premises or on site.
Contract works is another area that is regularly omitted. There is a value to your contracts and whether this is small or large, you need to agree who is going to be responsible should an incident occur, such as a fire, which means this is damaged prior to handover to your customer. Someone needs to ensure that this is covered and it is usually the contractor that is responsible.
Professional indemnity insurance
This is important for any business offering advice or a service. This will protect you from any work or advice that is faulty, or incorrect, and presents a financial issue for your customer.
It’s important to mention that it does not cover you for general bad works that have taken place because of poor work performance.
If something goes wrong, then ultimately the customer will be looking at you for recovery and even if you employ architects or designers, it is important you protect yourselves by a good quality insurance policy.
Since the fire at Grenfell, this type of insurance is proving challenging to secure, so make sure you seek renewal terms early and don’t leave any cover needed to the last minute.
Directors & Officers Liability insurance
In a fast changing regulatory environment, it is important Directors and Officers have a clear understanding of the risks they could be exposed to personally. Health & Safety investigations and prosecutions are commonplace these days and it is essential an insurance policy is in place, should they come your way.
This is another policy that is under severe challenges, so if you haven’t got cover in place, then you need to make early decisions to explore what is available.
What construction insurance do I need?
The level of construction insurance you need depends on the work you and/or your business carries out. There’s many types to consider to limit your exposure to the risk of claims.
Having worked with many businesses across the sector, we can offer expert guidance in creating a truly bespoke construction insurance package that reflects your individual business model.
Our approach to help you select the right level of cover begins with understanding more about you, this includes questions such as;
- What work will you be carrying out? – heights, underground, bridges, demolition, asbestos.
- What is the size of your business?
- How many employees do you have working for you?
- What plant/machinery/tools do you own and require cover for?
- What is the maximum value of any one contract?
Our experts are on hand to talk you through this, providing you with advice and explanations to ensure you get the cover you require. Speak to an expert now.
What does construction insurance cover?
The level of cover depends on what policies you require and purchase. Naturally, these cover different areas of your business so it’s important to understand each one in detail to ensure you have the appropriate level of protection.
Most importantly, you don’t want to be carrying out works that aren’t agreed and outlined in your business description and your insurers fully understand the activities of the business. Invalidation of your insurance presents significant risks for your business.
Why is the right insurance important?
Construction projects have evolved over the years, with larger values, more complex works and innovative technology and equipment. Any projects or work with larger contract sums can present new challenges and a much bigger risk impact.
No-one is invincible and whilst you may have all the safety measures in place, accidents and injuries happen. The nature of work across the construction industry makes it prone to accidents and claims, so make sure you’re protected.
The Ogden Discount Rate is used to work out how much compensation an injured party should receive. It’s important that you understand this and factor it into any risks when taking out construction insurance, to ensure you have the right Limits of Indemnity.
Any injury on a construction site can be life changing and you need the right amount of insurance in place to pay out should the worst happen, if not you may be individually liable.
Claims against you could essentially put your business in serious jeopardy, from a financial and reputation standpoint.
All of the above stress just how important it is to seek a comprehensive, accurate policy that reflects your work and business needs for maximum protection. Speaking to a broker who has a clear understanding of this specialist industry can be so important.
How much does construction insurance cost?
This all depends on each individual business requirements. It is essential that you have a policy that is tailored to your specific needs and then the right insurers with the most competitive terms can be sought.