How much does builders’ insurance cost?

As a builder, you’re not just crafting structures; you're also navigating risks. From accidental damage to third-party injuries, many situations can lead to financial strain or legal issues.

That’s where builders’ insurance comes in. It’s not just a safety net; it’s part of a responsible business strategy.

In this video, part of our Public Liability FAQ series, we answer the question ‘How much does builders' insurance cost?’.

What kinds of cover are included in builders’ insurance?

Builders’ insurance typically includes several types of cover, each addressing specific risks:

• public liability insurance
• employers’ liability insurance
• professional indemnity insurance
• contract works insurance
• tools and equipment insurance

Depending on the insurer, it may be possible to get these all together as a single bundle. However, it is also possible to buy policies individually if it better suits your business needs.

Why are the types of cover included in builders’ insurance important?

Understanding the different types of cover is essential for making an informed choice. It’s also important to note that, depending on how your business operates, some types of cover will be a legal requirement, while others may be contractual requirements.

Public liability insurance

Public liability insurance protects against the costs of claims brought against your business by third parties for injuries or damage caused by your work.

While having public liability insurance isn’t required by law, it is a sensible protection for a business to have. These types of claims are relatively common and can result in businesses paying large sums in damages and compensation.

In addition, many public-sector organisations and large companies looking to employ you for an infrastructure project will require you to have public liability cover as a term of your contract with them.

Some professional bodies that represent your trade will also require you to have public liability cover to become a member

Employers’ liability insurance

Employers’ liability insurance covers you if an employee is injured or falls ill because of the work they do for you.

It is a legal requirement if your business employs anyone. This includes both full-time and part-time workers, trainees, apprentices and even some types of contractors.

If an employee does bring a successful claim against you, it can result in you paying thousands of pounds to cover medical treatment, hospital transport costs, lost earnings due to time off work or even alterations that need to be made to the claimant’s home if they suffered life-altering injuries. 
Failing to have employers’ liability cover will result in hefty fines.

Professional indemnity insurance

Professional indemnity insurance is important if your business gives professional advice as part of its services.

If you end up providing bad or negligent advice to a client, which results in a financial loss for them, they may sue you for damages and compensation. Professional indemnity insurance will cover the costs if they make a successful claim against you.

Contract works insurance

Contract works insurance provides a safeguard for projects in progress. If a site you’re working on is hit by an unforeseen incident which could otherwise halt your project and harm your finances, like a fire, flood or vandalism, this cover will allow you to set the damage right quickly.

Tools and equipment insurance

Tools and equipment insurance is necessary for builders, as your tools are critical to your trade. This cover ensures you’re not out of pocket if your essential equipment is stolen or damaged.

Having this insurance means you can replace items quickly and get back to work, rather than risk being in breach of contract due to being unable to complete the job you are working on.

The cost of builders’ insurance

How much you pay for your builders’ insurance will depend on several factors, such as:

• the size and scope of your business: larger businesses with more employees or high-value contracts generally face higher premiums.
• the level of risk: high-risk activities or working in hazardous environments can increase premiums.
• the amount and types of coverage: more comprehensive coverage generally means higher premiums.
• your claims history: a history of many claims can lead to higher premiums.

Remember, while cost is a crucial factor, the cheapest option isn't always the best. It’s about finding the right balance between adequate coverage and affordability.

If you need help and guidance, it’s always best to start by speaking with an insurer that has experience of your industry sector.