Building project insurance should be a key part of every major building project, but we find it’s something that’s often overlooked by our clients.
Many people carrying out a self-build or renovation project just don’t give building project insurance a second thought. This is because they incorrectly believe that their builders will have all the insurance that’s needed to cover the building works. Or else they think that their home buildings insurance policy will cover the building works on their home while it’s being extended, or undergoing a major renovation. This is a serious problem and could potentially catch out thousands of people every year, as it simply isn’t the case.
Building project insurance is a specialist area. Cover for building projects is not generally available from the standard insurers. Your existing insurer is unlikely to have a suitable policy, and wouldn’t really understand what protection you’ll really need, as it is outside the normal scope of building insurance policies. There are however a small number of specialist building project insurance suppliers who will be able to provide you with helpful advice and an insurance product that need.
Why do I have to have Building Project Insurance?
This is the most common question our clients ask us – as they believe they are covered because their contractor will have Public Liability Insurance.
However Public Liability Insurance is there to cover the contractor against his liability to you for a negligent act, error or omission. It’s there for his benefit. It doesn’t cover your home if it is damaged by an accident onsite, or by something like a fire, a flood, or a storm. It also doesn’t cover you if any of your property is stolen from your site – an important point when there are so many deliveries and expensive building materials hanging around. Most alarmingly, it may not give you any cover if the building works cause an injury to someone, or damage a neighbour’s property.
If you are carrying out a building project that involves converting, renovating, remodeling or extending an existing structure, this original structure needs to be correctly insured. By definition you are making alterations to the building, and this carries an associated risk. Don’t assume that your home insurance covers the building works during the course of construction. Look at your policy carefully. Most home building insurance policies actually exclude alteration and renovation over a certain amount as a standard clause. Even if your home insurer will offer you some cover it will only be for things such as fire – the real risks, such as a wall or ceiling collapsing, won’t be covered.
What is Site Insurance?
A Site Insurance policy is a specialist insurance product designed to protect people carrying out major building projects on their homes. It’s also known as a Contractors All Risks Policy.
Site Insurance Policies are very comprehensive, and cover all risks of physical loss or damage, and are considerably better than policies which offer protection against just fire, flood, storm etc. Such policies can also usually be extended to include existing structures on an All Risks basis.
These policies don’t come cheap. Expect to pay upwards of £1500 for a year’s cover, but they will protect your building project and you, and give you peace of mind for the duration of the works.
What is a Structural Warranty?
A 10 Year Structural Warranty is a policy that covers a house against defects after the build has completed. It covers defects that become apparent in the design process, materials used or the actual workmanship. The warranty runs for 10 years from the point you receive your Completion Certificate. It is an important thing to have if you have self-built a new home. However, it’s not only important for you. It also enables a prospective purchaser to obtain a mortgage on the property if you then decide to sell your home.
The warranty provider checks the design of the build, and the construction whilst onsite, using a series of Technical Audits. These visits are to make sure there is no defective workmanship, or materials used. Defects identified along the way have to be remedied prior to issuing cover.
Structural warranties usually cost between £3500 and £10,000 depending on the cost of the build.
Here at CLPM we always recommend our clients talk to a specialist Insurance Broker to ensure they are covered for all of their building project insurance needs.
“Whether staying in your new home or not, peace of mind is important. Not all builders are NHBC registered, so it’s always a good idea to talk to an experienced, specialist insurance broker to check what cover you will require for your building project. We can offer a real alternative with selected insurers. We can help you through the process from start to finish, with clear explanations and ongoing advice.” Chrissie Jenkins, Countrylife Insurance Brokers
As you can see building project insurance is a complicated, specialist area. When planning your building project, having the right insurance and warranties in place should be at the top of your list.
If you are planning a major building project and want to know how CLPM can save you time, money and stress then get in touch. Call 01923 896550, email email@example.com or complete a contact form.