Anyone involved in construction, from designing to building, should know the importance of proper site insurance. There are many potential liabilities in this line of work – the bigger the project, the more risks there will be.
Unforeseen incidents on your construction site, from floods and fires to vandalism and theft, can lead to costly repairs or replacement work. This is where contractors’ all risk insurance comes in to cover these costs for you.
As a contractor, you would still be obligated to complete the work, and the customer wouldn’t want to pay twice over – but why should you be out of pocket for an incident that wasn’t your fault?
You deserve the peace of mind that this kind of coverage can give you, so keep reading to learn more about all risk contractors’ insurance policies and how they can help you and your business.
This type of flexible insurance policy provides far more extensive cover than the typical ‘named perils’ format. Also known as CAR insurance for short, or construction insurance, it offers financial support for contractors and construction companies.
While ‘named perils’ insurance only allows you to claim for certain conditions specified in the policy, ‘all risk’ insurance allows you to claim for more casualties that aren’t explicitly excluded. So, even if an incident category isn’t mentioned, the policy could still cover it.
‘All risk’ essentially means that the policy will cover all types of damage to works and equipment, unless the terms expressly omit the particular occurrence. The ability to claim for a range of property damages and third-party injuries can be very useful if something does go wrong.
Contractors’ all risk insurance is more or less an all-in-one policy that encompasses other common types of project insurance, including contract works and public liability cover. You can get separate policies for these, but it’s more efficient and cost-effective to roll them into an all risk policy.
In order for clients to get their own residential or commercial cover for the building in progress, their insurers will expect you (the contractor) to at least have the correct public liability insurance.
All risk insurance for contractors can generally be taken out by anyone working in any type of construction, from builders and bricklayers to plumbers and plasterers. Any business responsible for construction site works should consider taking out a contractors’ all risk policy.
The contract with the client should set out the obligations of each party, including who is responsible for ensuring each element of the build. It’s usually easier for the contractor to take care of it, but a joint CAR policy is sometimes preferred for larger projects with multiple parties involved.
For example, both the employer and contractor may want to be named in the same policy, with the option of also naming finance providers (e.g. banks or individual investors). All parties then have the right to claim against the insurance policy if damages or injuries affect their stake in the project.
In such a case, where multiple parties might make a claim under the same policy, all named parties have the additional responsibility of informing the insurer of any incidents that could lead to a claim, even if there are no intentions of making one at the time of notifying the policy provider.
The level of cover and length of the policy term can vary from project to project, so you always need to triple-check what’s covered and what isn’t. These contracts tend to include the following policies:
The ‘contract works’ element provides protection for the property while it’s being built, including the construction materials being used and stored onsite. If the structures in progress are damaged or materials stolen, the policy should cover the costs of repairs and replacement materials. However, it won’t cover any pre-existing structures on the site that you might also be renovating or converting.
If a third party is injured or their property is damaged while on your project site, they may make a claim against you. Having public liability cover means you won’t have to worry so much about legal fees and compensation if this does happen. A ‘third party’ could be anyone on the site who isn’t a contractor or employee, like sub-contractors, customers, suppliers, and members of the public.
Even if you aren’t actually employing anyone, employers’ liability cover tends to be a standard contractual requirement. This is because UK employment law makes it mandatory for companies to protect their employees while they’re working for you. If an unfortunate accident happens on your site and your employee suffers illness, injury, or even death as a result, this can cover their compensation.
There is a wide variety of expensive professional equipment in use on a building site at any given time, from scaffolding and Portakabin offices to cranes and excavators. Whether your company directly owns the machinery or you’re temporarily leasing it under a hire agreement, you need to be sure that your insurance can cover repairing or replacing equipment that gets damaged in your custody.
When it comes to power tools and related hand-operated equipment, many employees prefer to use their own – though some businesses prefer to supply company equipment. In either case, your site insurance should also cover damage or theft of own tools and any other personal belongings onsite. This usually won’t include sub-contractors, who should have their own cover in place for their own tools.
Depending on the provider, it’s possible to extend the coverage of builders’ all risk insurance to specifically include further conditions. A common option is non-negligence insurance, which covers you against claims for unexpected damage to neighbouring property resulting from your ongoing works. Legal expenses insurance is also useful should you need to seek expert legal guidance.
While CAR insurance has the advantage of covering a spectrum of policies, unfortunately, it can’t actually cover everything. The all risk insurance contract should explicitly state what the policy holder or holders won’t be able to claim for. The following are common all risk insurance exclusions:
Sometimes known as an ‘act of God’ or force majeure (French for ‘greater force’), any damages from an unpredictable and unpreventable event with no realistic human control over the outcome are often excluded from all risks insurance cover. These types of perils could be natural disasters like floods, hurricanes, and earthquakes, sudden events like riots or war, or pollution or radiation.
Different insurers will have different methods for assessing risks, and the cost of contractors’ all risk premiums will depend on a range of factors. Here are some common considerations that usually affect the cost:
Since this type of insurance covers you against a greater number of possible events, premiums are higher than other less extensive policies. However, you can try to keep your contractors’ all risk insurance costs down by avoiding riskier work in dangerous locations, and completing smaller contracts. You can also opt for the standard cover without paying extra for tailored extensions.
Whatever you’re looking for from contractors’ all risk insurance, we’re sure that we can help you here at Architects Certificate. Not only are we a leading provider of structural warranties with our ABC+ 10 Year Structural Warranty, but we also provide contractors’ all risk insurance quotes.
It may be easier to simply buy a new-build property, but many people dream of designing their own home. Self-build projects take a lot of time, effort, and money, but the reward of a totally customised residence is often worth it.
However, it’s crucial to ensure that such a big investment has the right financial protections in place from the start – including building site insurance and a structural warranty.
If you’re not sure whether a self-build structural warranty is necessary, or you don’t understand the difference between this policy and self-build site insurance, then this article is for you.
Read on to learn more about why both policies are essential for any successful and long-lasting self-build home.
Just as a standard structural warranty protects a building development during construction, and for a further ten years after completion of the project, the same applies for a self-build warranty.
The only difference is that rather than a developer or builder taking out the policy and passing it on to the eventual buyer, you would take out the warranty yourself as the builder of your own home.
Whether you participate in the design and construction or hire contractors to handle everything on your behalf, you’d still take the position and responsibility that a developer would.
When you take out a self-build structural warranty, the provider will carry out regular inspections throughout the building process, ensuring that any structural problems are caught and fixed as early as possible.
After your self-build home is completed and signed off, the ten year structural warranty will kick in from the date on the completion certificate. You’ll then have the assurance that you won’t be out of pocket if any latent structural defects show up over the next several years.
The contractors are directly responsible for the first two years, then the warranty provider will handle claims for the remainder.
A thorough structural warranty should cover defects due to poor design or workmanship and faulty materials or components.
This isn’t the same as home insurance, which you’ll need to arrange when you move in to protect your self-build from theft and accidental damage – which the warranty doesn’t cover.
So, why is it so important to get a self-build warranty before starting to build your own home? Here are five reasons to secure a structural warranty as early as possible in the self-build process:
1) Quality control – even if you have experience as a project manager, it always helps to get another pair of expert eyes and an impartial opinion on the proceedings.
2) Holding contractors liable – you can’t just rely on the contractor’s insurance, as it’s designed to protect them and not you, whereas your own warranty protects your investment.
3) Peace of mind – the last thing you want is an expensive and time-consuming legal battle if a fault occurs, but the warranty allows you to claim repair costs without litigation.
4) Raising finance – if you’re taking out a loan to fund your project, the bank is likely to require adequate insurance before offering you a mortgage.
5) Selling your home – in the event you end up selling your self-build within ten years, a buyer will also want a warranty for their own mortgage and peace of mind.
One of the biggest issues is funding the project. Unless you already have the money to pay for your self-build upfront, you’ll probably need a stage payment loan – which you’ll find hard to get without a structural warranty.
Even if you do pay for everything yourself, you’ll want a structural warranty in case latent defects develop, so you’re not left to foot the bill for repairs or replacements as well.
To clarify, a structural warranty is also not the same as buildings insurance, which is a type of home insurance alongside contents insurance. You’ll only need those once the building is complete and you’ve moved in, as these policies have different coverage that doesn’t include structural defects.
Whether you do the work yourself or appoint a contractor or builder to do it for you, you must have the right site insurance for the project. Of course, any third parties need their own insurance policies, but you can’t rely on those to protect you financially.
You should secure site insurance as soon as you purchase a plot of land for the self-build, ahead of getting your structural warranty before construction actually begins.
As the owner and overseer of the site and project, you’ll need employers’ liability insurance to cover accidents and injuries for any workers you employ. This is the only type of site insurance that’s actually compulsory by law.
However, it’s a good idea to have policies that cover these things, too:
Depending on the extent of your contract works insurance, you might need specific cover for the tools being used and stored on your self-build site. This could be owned plant or hired-in plant, plus any other materials insurance.
You’ll need self-build insurance for your building site from the start of construction to completion – though you may be able to extend the cover if the project overruns.
Just as most lenders require the reassurance of a structural warranty for any new build property, they’ll also require you to have the proper self-build site insurance throughout construction. Banks won’t just accept your contractor’s warranty – you’ll need your own cover to secure a mortgage.
While you’ll be more focused on setting up self-build site insurance at the start, you should apply for a self-build structural warranty a few weeks before construction is due to begin. This is because your warranty provider needs to carry out regular inspections throughout the duration of the build.
The site insurance will cover your structure, equipment, workers, and public liability until the self-build is complete, for the period agreed upon with the provider. The structural warranty will then cover your new home against latent structural defects for the next ten years from completion.
Here at Architects Certificate, we’re proud to offer a widely accepted ten year structural warranty for a variety of property types. Our ABC+ Warranty can also apply to self-build homes, so don’t hesitate to get in touch for a quote if you’re searching for a self-build structural warranty provider.
We’ll be happy to guide you through the process of applying for a self-build structural warranty.
Construction sites can be dangerous places and the risk of loss or damage to buildings or injury to people can be all too real.
If something happens you need to make sure you’re financially covered to protect the contractor or you as the employer from risks or damages.
This is when contractors all risk insurance comes in.
Contractors all risk is a non-standard insurance policy that protects contractors and employers from insurance claims for anything that happens while working on-site.
This includes for damage to property and injury to people and can help save on the costs and admin you might face by taking out separate policies.
For example, it could be a claim against you because a structure wasn’t constructed properly or another property was damaged during your construction project.
It could also include an injury claim from a subcontractor who was hurt while working on site.
Who is contractors all risk insurance for?
This type of policy is usually taken out at the start of the project by both the employer and contractor.
But it’s used by anyone who is working on a construction site.
The policy would cover the employer and contractor, and would also include any subcontractors and other parties involved in the project.
This includes everyone from the site managers to the plumbers and electricians.
In the event of a claim, both the employer and contractor would be able to seek insurance from the policy to help cover any costs.
Contractors all risk is a comprehensive insurance policy against loss and damage to property or personal injury from work completed on a construction site.
A typical insurance policy will include?
While these are the typical protections included in a policy, contractors all risk insurance essentially covers any risk unless explicitly excluded from the policy when it’s taken out to help protect against any eventuality.
This will depend on a number of things but most insurers will base the cost for premiums on some typical factors.
With so much riding on your contractors all risk insurance you want to make sure you’re getting advice from an experienced provider with knowledge of the construction sector.
At ABC+ Warranty we’ve got decades of experience helping contractors secure the right level of cover for themselves and subcontractors on a range of projects.
Get in touch with us for a quote.