What are the different types of builders' insurance?

If you are a builder, you know you need to consider your insurance. However, with so many different providers and so much terminology, it can be difficult to know what it all means, what you need and what you don’t.

In this video, part of our Public Liability FAQ series, we answer the question ‘What are the different types of builders' insurance?’.

What is builders’ insurance?

Builders’ insurance is a broad term used to describe several different types of insurance you may need.

What is included can vary from one provider to another, so always check exactly what you will be getting.

What are the different types of builders’ insurance?

The main types of builders’ insurance include:

• public liability 
• product liability 
• professional indemnity 
• insurance for your tools and equipment
• employers’ liability (if you employ anyone).

With each type of insurance, you may need a different level of cover.

What is public liability insurance and why do I need it?

This is designed to protect you and your business in the event something your business does (or fails to do) causes damage to someone’s property or results in an injury.

This insurance relates to customers or members of the public. For example, if a tool fell off some scaffolding onto a vehicle or passer-by, this type of insurance would cover you.

Product liability is similar. However, it relates to any products you supply or install causing damage or injury instead.

Cover levels typically start at £1 million rising to £10 million. Many large contractors may not do business with you unless you can show you have appropriate cover.

What is professional indemnity insurance?

This relates to any professional advice you may provide that turns out to be negligent or wrong, resulting in a financial loss for your client. The advice may be about design or specifications.

You will need to consider what level of cover you need depending on the nature of the work you do.

What is employers’ liability insurance?

Employers’ liability covers you if a current or former employee suffers an injury or illness as a result of working for you. You are legally obliged to have employers’ liability if you employ anyone – even if it’s only one person, or they are a part-timer or a trainee.

You may also need it in some situations where you work with sub-contractors.

If you are in any doubt, you should check with your insurer. You can be fined for every day you don’t have cover. The minimum amount of cover needed is typically £10 million.

What about insurance for my tools?

You should always have insurance to protect your tools from loss or damage. You will also want to make sure you have 24-hour protection.

The amount of cover you need may vary depending on your trade and the tools you need.