Builder is a very generalised term for a group of skilled and dedicated individuals covering everything from plumbing and electrical work through to construction, carpentry, roofing, and a host of other specialist trades. While in the vast majority of cases, a job will go without a hitch there are always those occasions when things don’t go quite according to plan.
In cases like this, whether it’s unintentional property damage (from muddy boots ruining a carpet to damage to the property itself), or missing deadlines on contracts, it’s important to make sure you’re financially protected from the possible consequences of various risks.
At Business Insurance Service, we understand not just the insurance industry, but the commercial sector too. Our brokers have years of experience and expertise in finding tradespeople from across all disciplines the right kind of Contractors’ All Risks and Contract Works insurance cover for tradespeople, giving both sole traders, SMEs, and large building contractors the protection they need.
What insurance does a Builder need?
There are certain liability insurance covers that every trades and construction company should have, or are legally required to have. Tradespeople insurance policies provide you with essential covers, such as Public Liability, Employers Liability, Contract Works and Tool Cover.
Additional covers may also be necessary for the projected being conducted, non-negligent liability or an insurance backed guarantee can sometimes be requested by clients and/or finance companies. At BIS we’re able to arrange cover for a multitude of construction and property development risks.
This short video outlines some of the risks associated with tradesman and the construction industry.
What is Public Liability insurance for Builders?
Public Liability – this is the one type of insurance cover that every business or trader, regardless of their profession – should have. As builders are often working on other people’s property, it’s essential to protect yourself against claims for damage to property or even personal injury compensation. It may also be a contractual requirement that you have public liability of a minimum amount (usually cover of at least £2-5million) before a customer will allow you to start work on their premises.
What is Employers Liability insurance for Builders?
Employer’s Liability – this is the only type of commercial insurance that is a legal requirement if you employ anyone, even on a sub-contracting or part-time basis. Even some family members can count as employees, and failure to have Employer’s liability insurance can result in a hefty fine. You can read our full overview on Employers Liability insurance here.
What is Contractor All Risks (CAR) insurance?
Construction projects, whether it’s a single building or a large, multi-unit site, can be exceptionally complex, and in many cases, subject to strict completion dates that if they’re missed can result in heavy fines for the construction company carrying out the work.
Contract Works Insurance, or Contractors’ All Risks insurance, provides you with cover for work that is being carried out on a site. If the progress of that work is delayed or damaged through natural events, vandalism or theft, then Contract Works Insurance can help to repair the work and minimise the cost to the construction company.
Bear in mind that Contract Works Insurance can be a very complex type of insurance, so it may be important that you talk to an experienced broker when arranging cover. Contract Works Insurance can also insure the construction company for any defects found during final testing, or at the time of hand-over/sign-off.
What does Contractor All Risks (CAR) insurance cover?
Extensions to standard Contractor All Risks (CAR) policies are include;
- Professional fees incurred in reinstatement of the works
- Restoration of plans or drawings
- Expediting expenses, such as overtime
- JCT contract conditions
- Off-site storage
- Debris removal
- Public authority requests
What is the difference between a Bona-Fide and Labour-only Subcontractor?
Understanding the differences between labour-only (LOSCs) and bona-fide subcontractors (BFSCs) can protect your construction firm from costly and damaging risks.
As the owner or manager of a construction firm, you know that construction projects, no matter the size or scope, can be significant undertakings full of challenges. One such challenge that you may encounter deals with what type of subcontractors you hire—specifically labour-only or bona-fide.
Knowing the differences between these two classifications can help protect your business from costly and damaging risks, including fines, penalties or whopping claims.
Who are Labour-only Subcontractors?
The defining characteristics of labour-only subcontractors are as follows:
- They work under your supervision and direction.
- They use your materials, kit, equipment and tools.
- They must comply with your health and safety policies.
- They do not have a guarantee for work done.
- They may leave part way through the job.
Essentially, labour-only subcontractors are additional employees that you hire to assist with a build project that is too large or complex for your full-time staff to handle in a timely manner.
As these subcontractors are employed for the duration of the build project, you are required to pay them the same wages as your full-time staff and classify them as employees.
Who are Bona-fide Subcontractors?
The defining characteristics of bona-fide subcontractors are as follows:
- They work under their own supervision and direction.
- They provide their own materials, kit, equipment and tools.
- They are responsible for their own health and safety.
- They may have additional employees.
- They provide their own method statement and are responsible for their own guarantees and maintenance
Essentially, bona-fide subcontractors are hired to complete a specific job—such as plumbing or electrical work—on a build project that your full-time staff is not capable of completing on its own.
As your firm would be hiring them on for a specific job, you would pay them as if it were a normal separate job, typically via invoice. In addition, because they are working independently of your firm, bona-fide subcontractors should have their own liability insurance.
How do I know if a contractor is a Labour-only or Bona-fide?
If you can answer yes to all or most of the following questions, the worker is probably labour-only:
- Are they paid hourly, weekly or monthly?
- Can they receive overtime or bonus pay?
- Do they work a fixed number of hours?
- Can the principal contractor direct them how, when and where to carry out their work?
- Can the principal contractor direct them from task to task?
If you can answer yes to all or most of the following questions, the worker is probably bona-fide:
- Are they paid on a fixed-price contract?
- Do they decide their own schedule?
- Do they decide what, how, when and where to do their work?
- Are they responsible for correcting unsatisfactory work?
- Do they work without supervision?
What additional insurance should Builders consider?
In addition to the covers listed above we would recommend considering these additional policies and cover.
Personal accident insurance – it’s not just cover for other people and their possessions that’s important – personal accident insurance is vital too. Most tradespeople are self-employed, which means if they can’t work because of an accident or injury, the income stops. Personal accident cover will ensure that even if you can’t get back to work, there is still money coming in to cover bills such as your mortgage or rent.
Specialist vehicle cover – normal motoring insurance will not cover a vehicle for business use, so tradespeople and contract workers will need to take out specialist commercial vehicle insurance. This also often allows you the option of adding extra cover to protect contents such as tools, as long as they are not left in the vehicle overnight.
Professional Indemnity – As a professional, you and your business are expected to deliver a quality of service that falls within the expected accepted standards of your industry. If mistakes are made and a client sues you then this could be financially devastating to your business. Professional indemnity insurance gives you the reassurance that you are protected against the cost of a lawsuit or claim. Compare professional indemnity quotes from leading PI insurance providers here.
Directors and officers insurance– to protect company directors being held financially responsible for claims against the company.
Owned and Hire-In Plant
What Builders insurance can Business Insurance Service help with?
Our professional brokers can arrange competitive construction insurance programmes for contractors engaged in the construction of houses, flats, factories, offices, schools, roads and rail, we appreciate these are only some of the products of the construction industry.
Activities we insure include the building of new property, including site preparation, as well as additions and modifications to existing ones.
The construction industry also includes maintenance, repair and improvements on existing property, we arrange competitive insurance regardless of the projects and activities that your business is liable for.
If you can’t arrange an online quotation instantly via our website, there will be some further information we need from, you, our trained brokers will contact you shortly after your call back request to progress with arranging quotations directly with our extensive panel of construction underwriters, We are able to bind construction insurance cover for a multitude of high risk work, to include working with heat, work at height and within hazardous locations.
How can Business Insurance Service help Builders?
Whether you’re a sole trader or a large construction company, your insurance portfolio has to be up to date and provide you and your business with the right level of protection. Rather than trying to find Contract Works Insurance or tradesperson insurance by hunting through countless websites, let us or our website do it for you.
We’re members of the British Insurance Brokers Association (BIBA) and work with some of the largest and best-known insurance providers in the UK, including Lloyds of London for larger, more complex and high-risk customers. We’re fully regulated and committed to delivering a premium quality, trustworthy and reliable service to all our customers, regardless of size.
As preferred brokers working with some of the largest insurance providers in the UK, we have immediate access to a huge range of policies for businesses, tradespeople and construction companies. We provide our customers with a bespoke or package service, creating insurance portfolios that are specifically tailored to your individual needs, and your budget.