Checking Everyone Else’s Insurance
Once you’ve arranged the right insurance for your own building project, it can be tempting to think the job is done. But there’s another crucial step – making sure that everyone else involved in your project has the right cover too.
Architects, engineers, surveyors, main contractors, subcontractors, and specialist trades all need appropriate insurance for the work they do. If they don’t, you could be left paying the bill for their mistakes or accidents.
Why This Matters
Even if you’ve protected your own investment with building project insurance, there are still gaps that only your contractors’ and professionals’ own policies can fill. Without them:
- You may struggle to recover costs if they cause damage or make an error
- You are responsible for anything that happens on your property that causes loss, injury or damage to others
- If your contractors aren’t insured properly then the cost of making good could be down to you
- Your insurer won’t pay out for losses that someone else is liable for
- You could face legal disputes and delays while liability is argued
The Minimum Cover to Expect
At the very least, the following types of insurance should be in place for relevant parties:
Professional Indemnity Insurance (PI)
Covers professionals (architects, engineers, surveyors, basement contractors etc) against claims for negligence in their design, advice, or specification. This type of cover is also mandatory for electricians and gas engineers and most heating and ventilation installers.
If your builder makes an alteration or change to the specification during the building works, without sign of or approval by the structural engineer or architects, or provides the design, then the they should have PI cover too.
Public Liability Insurance (PL)
Protects against claims for injury to third parties or damage to third-party property during the works. This could be legitimate visitors to the site like a postman, or trespassers or children on the site illegally. It can also include neighbouring properties, both attached and detached, which might suffer loss or damage because of the works.
Employers’ Liability Insurance (EL)
A legal requirement if a contractor employs staff (including casual labourers). This covers injury or illness suffered by employees and caused by their work. Note that if you are employing any labour only subcontractors, or you have volunteers, friends or family doing work on the site, you may need to also have this cover too.
Don’t Settle for “To Whom It May Concern” Letters
Many contractors will offer a brief letter from their broker confirming that they have insurance. While this may look official, it’s often useless – it will usually include a disclaimer such as “subject to policy terms and conditions” and won’t tell you what the insurer believes they are covering and whether the risk has been properly described to them.
What You Should Ask to See
To properly check a contractor’s or professional’s insurance, request copies of:
- Policy schedule – showing the policy number, period of cover, limits, and insurer details
- Statement of fact or proposal form – showing the activities the policy covers, the number and type of employees and workers that the policy covers and the value of the building contracts that the insurers understands the contractor to work on
- Full policy wording – to understand exclusions and conditions
Your insurance advisor can help you interpret these documents and confirm that the cover is fit for purpose.
Real-World Example
A property owner engaged a specialist contractor for cladding replacement. The contractor provided a broker’s letter confirming cover, but no one checked the actual policy. When a fire occurred due to a welding accident, the claim was rejected – the contractor had told his insurer that he didn’t do any work involving heat. The owner had to pay for repairs and faced significant delays.
Check Subcontractors Cover Too
If your main contractor is using Bonafide or Labour Only Subcontractors, don’t assume they’re automatically covered by the main contractor’s policy. It’s not unusual for builders to forget to tell their insurers about labour only workers, or to assume that their casual staff have their own cover. Bonafide subcontractors such as Electricians, Gas Fitters, Plumbers, Heating and Ventilation Installers will always have their own insurance policies, which will need checking too.
All main contractor policies require the builder to check the validity of their subcontractors insurance and to maintain up to date records to show that they have done this. This very rarely happens and claims can and will be refused if they don’t, so you should make the point of asking for these details too.
Keep Checking Throughout the Project
It’s not enough to check insurance at the start. Policies will renew mid-project, might lapse beforehand due to non-payment, or be cancelled without notice to you. For long projects, it’s wise to:
- Request updated documents at renewal dates
- Confirm cover is continuous without gaps
- Keep tabs on any contractor who seems to be struggling financially – the insurance premiums are the first thing that get cancelled in the event of difficulties.
Another Real-World Example
Midway through a large renovation, the main contractor’s public liability policy was cancelled for non-payment. Two weeks later, a falling scaffold plank damaged a neighbouring car. With no active cover in place, the cost fell to the property owner.
How an Insurance Advisor Can Help
Your broker can:
- Verify each party’s cover is adequate for the work they’re doing
- Check that the contractors disclosures match the project parameters
- Spot exclusions that could leave you exposed
- Keep a record of all insurance documents for reference if there’s a claim later
Key Takeaways
- Your own insurance isn’t enough – everyone working on your project must have their own cover.
- Always check policy schedules, statements of fact, and full wordings – not just broker’s letters.
- Re-check insurance during the project, especially at renewal dates or if a contractors appears to be in financial difficulties.
- Your insurance advisor can help you avoid costly gaps in cover.
Need expert help checking contractors’ insurance before work starts?
Call 01825 745 410 – every call is answered by a qualified advisor.
Email enquiries@jctinsurance.com for a fast, personal response.
Next article in the series: Don’t Forget the People Helping You