What insurance cover do construction projects need?

Starting a construction project, whether it’s a small home renovation or a large commercial build, can involve a lot of unique risks.

Construction insurance is designed to protect against risks such as property damage, injuries to third parties and other liabilities that can occur on a construction site.

However, if you’re new to the construction industry or construction insurance, it can be confusing to understand all the different types of insurance available to you.

To help you navigate the different options and make sure you have the right protection, we have put together this detailed guide about the most common types of insurance for construction projects.

Below we explain the different types of insurance available to you, what cover each of the policies can provide, and why they might be important for your project.

From Employers’ Liability insurance, which is a legal requirement, to more specialist solutions such as Latent Defects and Professional Indemnity insurance, understanding these options can help you to protect your project from financial setbacks and provide peace of mind that you have cover in place in the event of an accident.

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Public and Products Liability Insurance

Public Liability insurance covers claims from third parties who suffer injury or property damage as a result of the construction activities.

Products Liability insurance, on the other hand, covers claims related to defects in products supplied by you.

These types of insurance can be important for construction projects as they can offer protection against potentially expensive financial claims. For instance, if a passerby is injured by falling debris from a construction site, Public Liability insurance would cover the legal and compensation costs.

 

Employers’ Liability Insurance

Employers’ Liability insurance is a legal requirement in the UK, protecting businesses against claims from employees who suffer injury or illness due to their work.

This cover is vital for construction companies due to the high-risk nature of the job. It means that if an employee is injured on site, the business is covered for legal fees and compensation costs in the event of a claim, so it offers protection for both the employer and the employee.

 

Plant (Owned and Hired), Tools and Equipment Insurance

Construction projects heavily rely on plant, tools and equipment – so getting cover in place in case anything happens to them can be critical.

Owned Plant insurance covers your own machinery, while Hired-in Plant insurance covers equipment rented from third parties. This insurance can protect against theft, damage, and breakdown, ensuring that any delays or financial losses due to equipment issues are minimised.

For example, if a hired crane is damaged on site, the Hired-in Plant insurance policy would cover the repair or replacement costs.

 

Professional Indemnity Insurance

Professional Indemnity insurance is crucial for professionals such as architects, engineers and consultants involved in construction projects.

It can cover claims for negligence, errors or omissions in professional services. For instance, if an engineer’s miscalculation leads to structural issues, this insurance could cover the legal costs and any compensation awarded.

Professional Indemnity insurance can protect professionals from the financial fallout of potential mistakes, ensuring that their reputation remains intact.

 

Contract Works Insurance

Contract Works insurance covers damage to buildings and materials from the start date of the project, all the way up to its completion or handover

This includes incidents like fire, theft, vandalism and adverse weather conditions, so it is crucial for ongoing projects as it makes sure that, in the event of an accident, the project can continue without significant financial loss.

For example, if a partially completed building is damaged by a storm, Contract Works insurance would cover the cost of repairs, allowing the project to stay on track.

 

Existing Structure Insurance

Existing Structure insurance can be important when working on renovations or extensions, as it covers damage to the existing building during the construction process.

For example, if a wall in an existing building collapses during renovation, this insurance would cover the repair costs. This cover can be critical for projects involving older buildings that may be more susceptible to damage during construction work.

 

Latent Defects and Building Guarantees

Latent Defects insurance covers structural issues that become apparent after project completion, often many years later. Building Guarantees, also known as Structural Warranties, provide similar coverage but are typically required by mortgage lenders.

These types of insurance make sure that, if a structural defect is discovered after the building is completed, the cost of repairs is covered – protecting the construction company from significant financial liability and maintaining client trust.

 

How Yutree Insurance can help your construction business

We provide industry-leading insurance solutions for contracting trades, catering to businesses of all sizes.

With our in-house scheme, we can offer tailored insurance options for every sector within the construction industry. Additionally, we partner with various insurers in the construction field so that our clients receive the most competitive and suitable coverage for their needs.

Our clients include general builders, plumbers, electricians, property developers, carpenters and civil engineers. This is a core specialty of our business, and we frequently help our clients ensure their insurance coverage aligns with their contractual liabilities and responsibilities, such as those under JCT and CPA conditions.

At Yutree, we provide industry leading solutions for all contracting trades – from the smallest to the largest firms.

Learn more about how Yutree can help your business and get a quote today:

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