When embarking on a self-build project, it is important to ensure that you have appropriate insurance cover in place throughout the various stages of the process.
Land and Property Purchase
When purchasing the land or property for your self-build project, you will need to buy property or landowners liability insurance. Even if you don’t intend to work the site for a period of time, you will still be exposed to the possibility of trespassers or people who are lawfully on the site such as postmen or the public using a public right of way, being injured.
You can buy stand-alone liability cover or purchase a Self-build policy from the outset. Although it might sound sensible to start with a Self-build policy it will probably be cheaper to start with a short period liability policy whilst you get your plans in place. JCT Insurance Expert can help you compare costs and decide which is best for you and your project.
You might also want to consider environmental liability cover to protect against issues arising from contamination of, or from, the land, depending on its previous or continuing use.
Planning Permission
Before starting any construction work on your self-build project, you will probably need to obtain planning permission from the local council. It is important to check with your insurance provider that the land or property will be covered whilst you go through this process.
Building Guarantees, Structural Warranties and Latent Defect Insurance
This specialised insurance provides cover for the cost of repairing hidden defects in the construction that come to light after the project is completed. Similar in nature to an NHBC guarantee these products offer vital protection for the integrity of the works for up to ten years after the project has completed. This can be for the whole build or for parts of it, such as the foundations or flat rooves for example.
Often overlooked, guarantees and warranties are best purchased at the outset of the project. This is because the insurers structural engineers will want access to the works to assess their adequacy, Insurers surveyors may replace the services provided by building control, which will offer a saving if instructed at the commencement of a project.
These types of cover will invariably be needed by lenders during and after the works are completed.
If a Structural Warranty is purchased after the building project is completed a higher premium will be payable as insurers can’t adequately assess what work has been done. You might not be able to get the full cover that a lender requires after work is completed. Having cover in place can delay or derail a property sale, result in higher interest charges applying, or reduce the sale value of a property.
Construction Phase
During the construction phase of the self-build project, it is essential to have appropriate insurance in place to protect against risks such as damage to the property, theft of materials, or injury to workers on site.
Self-build insurance, which typically covers structural damage, theft and vandalism, public liability, and employer’s liability and a variety of other extras like tools, machinery and hired in plant, will normally be appropriate if you are undertaking all the work yourself, employing others for some of the work, or using a contractor.
Typically, you will buy cover for the project period. The cover can be extended if the job overruns, but most insurers will stop cover if the work doesn’t progress in a meaningful way. unless there is a solid reason, like a planning appeal, for work stalling. You should tell your insurers before cover ends if you need to extend the policy or protect the site whilst work is paused.
Cover should be in place when you start site clearance, demolition, or groundworks, and continue until the project is signed off by building control.
If there is an existing structure on the land you will need to insure it, even if you are planning on knocking some of it down.
For the works themselves, you will need to insure the building as it grows. This is contract works cover and provides protection for the money you invest in the actual works themselves until they are complete and can be covered by a normal property or homeowners policy.
Non-Negligence Cover
Depending on the type of work that you are doing, you might need to consider non-negligence cover. This is for damage that the work might cause by accident to neighbouring properties and would include removal of support, subsidence, alteration to the level of the water table, heave etc.
Public Liability Cover For The Works
If you are project managing your own site, or employing a project manager to do this on your behalf, you are, in the eyes of the law, the person controlling the site. This means you should buy full project liability as opposed to just property or land owner’s liability cover.
Property or Land Liability Insurance is not the same as Liability cover for the works. If you are taking responsibility for the works, then you will need to include cover for any damage that is caused by them. Such a policy will respond to claims, made against you, even if the circumstances suggest that the loss or damage is a result of the actions of a sub-contractor.
You should be careful to check, and keep records of, the cover that the trades you use have. This should include any Bona Fide or Labour Only Subcontractors that you use. Remember to check the trade description and number of workers recorded on the policy as well as the renewal dates and that the cover limits are suitable not just for your job, but any damage that could be caused to surrounding property.
Employers Liability Cover
You are likely to need employers liability cover, even if your “employees” are friends or free workers. This is a legal requirement. Labour only subcontractors or people you pay day rates to are likely to be considered employees and will need to be covered by employers liability cover. Plumbers, electricians and professional service providers are likely to be considered as Bonafide subcontractors, in charge of their own system of work, their own tools and materials, and in all likelihood will have their own insurance. But be careful to check this.
Tools, Equipment, Plant and Hiring Fees
If you are doing the work yourself you may need to insure your own tools and equipment and any plant or machinery you hire in against loss or damage.
Earth movers, mini diggers and the equipment used for building works are extremely attractive to thieves so should be securely stored when not in use, with keys removed from the site and protections such as wheel clamps and steering locks put in place.
Any hire agreements that you have will normally include a clause requiring you to pay lost hire charges suffered by the plant owner whilst the machinery is being repaired or replaced.
Completion
Once the self-build project is completed, and signed off by building control, you will need to review your insurance cover to ensure that you have the appropriate level of protection in place for your new property. This could include buildings insurance to cover the structure of the property, contents insurance for your belongings inside the property, and public liability insurance to protect against any claims made by third parties while on your property.
Property and Home Owners Insurance
When applying for cover you should remember that your property might be unusual or be constructed from non-standard materials. Specialist and extraordinary properties need suitable insurance and you will need to carefully describe to insurers the unusual features of your home. Unless you have built a standard home, of brick and tile, you should seek advice on insuring it.
Overall, insuring a self-build project in the UK is a complex process that requires careful consideration at each stage of the project. It is advisable to work with an experienced insurance provider who can guide you through the process, obtain quotes from multiple insurers, and ensure that you have the appropriate cover in place to protect your investment.
Get a Quotation
For a quotation, help or advice call JCT Insurance Expert on 01825 745 410 or email enquiries@eig.email Or download, complete a proposal form and send it back to us.