Top 10 in­sur­ance ques­tions an­swered

ever won­dered why you need spe­cial­ist site in­sur­ance when start­ing your ex­ten­sion pro­ject? Here’s what you need to know...

Real Homes - - Advertorial -

Q: Surely my builder’s in­sur­ance cov­ers me?

A: Your builder may say they are ‘fully in­sured’ – and they prob­a­bly be­lieve it them­selves – but the chances are they ac­tu­ally have pub­lic li­a­bil­ity in­sur­ance which only cov­ers them in the event they cause dam­age or in­jury to a third party fol­low­ing a neg­li­gent act: some­thing you would have to prove. How­ever, pub­lic li­a­bil­ity in­sur­ance doesn’t cover is­sues like storm dam­age, theft of ma­te­ri­als, theft of plant and equip­ment, ar­son or fore­seen li­a­bil­ity – es­sen­tially all the things you re­ally do need cov­ered.

Q: Can’t I just use my stan­dard home in­sur­ance for the work?

A: Home in­sur­ance def­i­nitely doesn’t cover build­ing projects and specif­i­cally ex­cludes al­ter­ations, ren­o­va­tions and ex­ten­sions as well as un­oc­cu­pied prop­er­ties. This was clearly ex­plained in the BBC’S Rip Off Bri­tain pro­gramme where a cou­ple’s build pro­ject was to­tally de­stroyed by fire and their home in­surer re­fused the claim. Think about it – you’d carry on pay­ing the mort­gage on a home that no longer ex­ists.

Q: My plant hire com­pany al­ways in­sures their equip­ment, so why do I need more in­sur­ance?

A: The per­son sign­ing the hire con­tract is in­vari­ably re­spon­si­ble for re­pair­ing dam­aged plant or re­plac­ing it if it’s lost or stolen while on hire. You are also re­spon­si­ble for the con­tin­u­ing hire charges un­til it is re­placed. If you are hir­ing a crane and op­er­a­tor, you will be re­spon­si­ble, and even a small crane can cost hun­dreds of thou­sands of pounds to re­place. Plant, tools and equip­ment can all be in­cluded on a site in­sur­ance pol­icy.

Q: If I choose to in­sure for a lower value, will it save me money?

A: You should in­sure for a value rep­re­sen­ta­tive of a pro­fes­sional con­trac­tor clear­ing the site and re­build­ing your pro­ject from scratch – the re­in­state­ment cost. If the in­surer identifies that you have un­der­in­sured, they will re­duce the claim pro­por­tion­ately.

Q: If my builder dam­ages my neigh­bour’s foun­da­tions, isn’t this cov­ered by their in­sur­ance?

A: This is a huge pit­fall. If you are work­ing close to your neigh­bour’s foun­da­tions and weaken them, that dam­age won’t be cov­ered by pub­lic li­a­bil­ity in­sur­ance and you will need to make spe­cial ar­range­ments with your site in­sur­ance provider to get ad­e­quate pro­tec­tion in place.

Q: I can’t be held re­spon­si­ble if my builder slips off the scaf­fold or a lad­der, can I?

A: The Health and Safety Ex­ec­u­tive has pro­duced clear guid­ance for self-builders. If you are manag­ing or ex­er­cis­ing con­trol over the pro­ject your­self, you au­to­mat­i­cally carry the re­spon­si­bil­ity and could end up be­ing pros­e­cuted and fined. A worker who is paral­ysed could be look­ing to re­ceive com­pen­sa­tion run­ning into mil­lions of pounds to cover full-time care and so forth. This is why you get em­ployer’s and pub­lic li­a­bil­ity cover on most site in­sur­ance poli­cies.

Q: How much do util­ity com­pa­nies usu­ally charge for re­pair­ing their dam­aged ca­bles?

A: Emer­gency util­ity re­pair bills can run into thou­sands of pounds – it’s not just elec­tric­ity, think about gas and fi­bre op­tic ca­bles, too.

Q: I don’t think I need to bother with site in­sur­ance un­til later in the build – is that right?

A: This is a short-sighted ap­proach and, if any­thing, will end up cost­ing you more money. Even if there are only three months to go on your build, the in­sur­ance provider will charge you a pre­mium that is based on the re­in­state­ment cost from the point the work started.

Q: Surely my in­sur­ance will au­to­mat­i­cally re­new?

A: Site in­sur­ance pro­vides pro­ject­based cover and is not an­nu­ally re­new­able, so if you run out of cover you will need to ar­range an ex­ten­sion for it – you will not be of­fered a re­newal. Equally, if you fin­ish early, you will not be en­ti­tled to a re­fund.

Q: I think you get cover on a new-for-old ba­sis..?

A: Clearly, if an el­e­ment of the prop­erty has to be re­built it will be built new, how­ever, plant tools and equip­ment are in­sured on an in­dem­nity ba­sis – so a three-year-old dig­ger will be set­tled at the re­place­ment value of a three-year-old dig­ger and not as new. In re­al­ity ev­ery­one’s cir­cum­stances and projects are go­ing to be dif­fer­ent, which is why it’s re­ally im­por­tant you seek ex­pert ad­vice from a spe­cial­ist site in­sur­ance provider be­fore em­bark­ing on your build – it can lit­er­ally save you thou­sands.

For more in­for­ma­tion, call 0345 230 9874, or visit self­build­

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