What Insurance Covers Do Builders Need to Protect Their Business?

Accidents can happen on any job. Find out what insurance you need as a builder to protect your business, including public liability, employer’s liability, and tools cover.

What does builders insurance cover?

Insurance for builders can cover you for most types of work including:

Building new or repairing old private and commercial properties
Surveying visiting properties for quotes
Public contracts
General building jobs
Building work you undertake abroad

What insurance covers do I need as a builder?

The insurance you need as a builder will depend on a range of factors, including where you are working, and the amount of risk involved in the job.

It is a good idea to talk to a specialist insurer who not only understands the risk you face in your industry, but also knows how to calculate the risk you personally face. They can offer you a tailored builders insurance package that offers only the cover you need, so you don’t pay for anything else.

Some of the most common covers include:

Public liability
Employers liability
Theft or damage cover for your tools
Contact works - to cover on-going jobs from damage or prolongment
JCT (non-negligence insurance) - to cover work already completed

Public liability insurance for builders

Public liability insurance is designed to protect you if something goes wrong while you’re on the job. It covers claims made by a third party, which is anyone who isn’t you or one of your employees. This includes customers, suppliers or even someone walking past your worksite – for example a passer-by tripping over your equipment and getting injured.

Legal action, for the consequences of third-party personal injury or property damage from your activities, is a real threat. For example, if a passer-by trips over your equipment on a job and gets injured. Public liability insurance will step in to help you cover the cost of legal defence costs of these allegations.

Depending on your industry, your business may have more or less risk associated with it for the public. For example, a construction firm is considered higher risk than a retail store due to the level of potentially hazardous nature of premises worked at or on.

If you are working using processes involving the application of heat; at height or depth; or where there are many people around; you will need more extensive public liability cover.

The type of premises you work at also has an influence on the cover you need. Work at ports and airports is particularly hazardous due to the number of people and high values at risk e.g. terminals and aircraft. You will need therefore specialist public liability cover to work as a builder at an airport.

Employers liability insurance for builders

If you have staff, employers' liability insurance is a legal requirement. It protects you from financial losses resulting from employee claims for injuries or illnesses sustained during work, covering compensation, damages, and legal costs.

Builders’ employers liability insurance to cover contractors

If you employ contractors, you must be aware of the differences between types of contractor, and ensure your policy covers all workers that require it.

A contractor can be:

Self-employed
A worker or an employee (working for a client and employed by an agency)

Builders’ employers liability insurance for subcontractors

There are two types of subcontractors, both with different requirements under employers' liability insurance.

A bona fide subcontractor should be working under his or her own direction, use his or her own tools and materials, have his or her own liability insurance and understand his or her legal liabilities. There is no need for employees of the bona fide subcontractor to be included in employers' liability or public liability premium calculations.

Labour-only subcontractors work fully under the direction of the contractor. They are provided the materials to work with; given detailed instructions of what to do, and then supervised; and must comply with health and safety arranged for them. Under UK law, if you use a labour-only subcontractor they count as your employee, and you as their employer take on the full risk of public, product and employers' liability.

Builders’ tools insurance

Tool insurance is there to cover the cost of replacing or repairing equipment if it is damaged or lost, for example due to flooding, fire or theft. Note that if you are keeping tools and equipment overnight in a vehicle, it must be locked and in a secure location – talk to your insurer to confirm the specific conditions.

Builders’ contract works insurance

Contract works insurance is an insurance policy that protects work in progress on a construction or renovation project against accidental damage, loss, or destruction.

Builders’ JCT insurance

JCT is a specialist insurance that covers an existing building structure and contract works while you as a builder are renovating the property.

Builders insurance from Towergate

If you want to build a solid foundation for your business, talk to the experts at Towergate about builders’ insurance.

Builders’ public liability insurance covers legal costs for allegations of accidental personal injury or damage to third party property, cover to pay for third-party compensation and repairs to damage.

Get a builders insurance quote

Get a builders insurance quote online or call us on 0330 173 3617.

About the author

Diane Caplehorn is a respected industry leader with over 25 years' experience within the insurance sector. She works across a wide spectrum of insurance products and policy development, delivery and optimisation for health and beauty, professional risks and martial arts clients.