What insurance should a builder have, and what does it not cover?

Insurance on a building job is not one thing, and the differences matter at exactly the moment something goes wrong. The commonest surprise is not that the builder was uninsured; it is that they were insured for something other than what happened, and that the homeowner's own policy had quietly stepped back for the duration of the works.

Step by step

1. Ask for public liability cover.It responds to injury to people and damage to third-party property caused by the builder's activities — a dropped scaffold board, a flood from a cut pipe, damage to a neighbour's car. This is the baseline for any trade coming into your home.
2. Ask for employers' liability if they have workers.It is generally a legal requirement where a business has employees, and covers injury to their own people. Sole traders working entirely alone may not need it, but anyone with a labourer does.
3. Ask about contract works cover on a larger project.It covers the work in progress and the materials on site against fire, storm, theft and damage before the job is complete. Without it, a fire in a half-built extension is an argument rather than a claim.
4. Understand what none of these cover.The quality of the workmanship. Public liability responds to damage caused; it does not pay to redo a badly built wall. That is what the contract, the retention and any workmanship guarantee are for.
5. Ask for the certificate rather than a description.The certificate shows the insurer, the policy number, the limit of indemnity, the trade description and the expiry date. Check the trade description covers what they are doing on your job.
6. Verify with the insurer or broker if the job is large.One call confirms the policy is live. Certificates are documents like any other, and on a substantial project the check is proportionate.
7. Tell your own home insurer before work starts.Most home policies restrict or exclude cover while building work is under way, particularly for unoccupied periods, structural work and works above a value threshold. Tell them, get the response in writing, and comply with any conditions they impose.
8. Check who insures what you have bought.A kitchen sitting in your garage waiting to be fitted is usually your problem, not the builder's contract works policy. Agree in writing who carries the risk of materials you have supplied.

Tips

• Ask what the limit of indemnity is, not just whether there is cover. A limit that would not rebuild your roof is not much use on a roofing job.
• If the builder is subcontracting, ask whether the subcontractors carry their own cover or sit under the main contractor's policy. The answer matters when the damage is caused by a subcontractor.
• Keep the certificate for the duration of the job and afterwards. Claims sometimes arise months later, and by then the certificate is hard to obtain.

Common mistakes

• Assuming public liability covers bad workmanship — It covers damage and injury caused by the work, not the cost of putting defective work right. Those are different risks and they need different remedies.
• Not telling your own insurer about the works — A restriction or exclusion applying during building work can leave you uninsured for an unrelated loss — an escape of water, a theft — at exactly the time the house is most exposed.

Questions people ask