Builders Insurance

What is builders insurance?

Builders insurance is a combination of covers designed to protect construction professionals against the financial fallout of claims, accidents, delays and legal disputes. It is not a single policy but a tailored package based on the work you do, how many people you employ and the risks involved.

The reasons it matters are practical. Falls from height, slips on wet concrete, dropped bricks and misfiring nail guns can turn a routine day into an injury claim, and in construction those claims can run into the tens or hundreds of thousands. Tool theft is rampant, vans get broken into, and cement and timber go walkabout. Projects get delayed by fire, flood, theft or vandalism. Clients may accuse you of poor workmanship, or a structural fault months later may lead to a claim. The right package pays out where it should and also gives you legal defence and advice if you face allegations.

Who needs builders insurance?

You almost certainly need builders insurance if you are a self-employed builder, run a limited company in the construction sector, employ subcontractors or apprentices, work on site (yours or someone else's) or quote for public sector or commercial jobs. Many clients will not let you step onto site without seeing proof of cover, particularly public liability and employers' liability.

Your business structure changes what you need. Sole traders may have fewer obligations (for example, no employers' liability if they work entirely alone) but still need cover for tools, public liability and contract works. Limited companies, especially those working with subcontractors or alongside other trades, often need more comprehensive policies, and firms quoting for local authority or housing association work will usually face specific cover requirements.

Labourers are not automatically exempt. Even if you are hired by someone else, you might be classed as self-employed or a labour-only subcontractor, in which case you are responsible for your own public liability cover. If you are unsure, ask the main contractor whether they are providing cover and get it in writing.

What does builders insurance cover?

A builders insurance package is made up of several covers, each dealing with a different risk.

• Public liability insurance covers you if a third party (a client, passer-by or supplier) is injured or suffers property damage because of your work, such as a falling brick hitting someone, damage to a neighbour's garden wall or a delivery driver slipping on a wet floor. It is often mandatory for large jobs or public sites.
• Employers' liability insurance covers you if an employee is injured or becomes ill through work, for example a scaffolder falling due to poor PPE or a labourer suffering long-term back problems from lifting.
• Tools and equipment cover protects hand tools, power tools and specialist equipment whether they are on site, in your van or locked in a container.
• Contract works insurance, also called contractors all risks insurance, covers materials, works in progress and temporary buildings against fire, flood, theft, vandalism and more. It protects you mid-project, is often required by main contractors and can be extended to include own plant, hired-in plant and employee tools.
• Professional indemnity insurance is not needed by every builder, but if you offer design, structural calculations or even basic layout advice you could be liable if that advice causes a financial loss. It matters most for design and build firms, builders working closely with architects or surveyors, and renovation specialists.
• Commercial vehicle insurance is needed if you use a van for work, because the policy must cover business use rather than just social and domestic. You might also need an any-driver van policy if several staff drive it, tool cover within the van, and breakdown and courtesy van cover.

Optional extras include hired-in plant insurance for machinery you hire such as diggers and dumpers, own plant cover for plant you own outright, business interruption if an insured event stops you working and earning, legal expenses for contract disputes, tax investigations and employment law claims, and personal accident cover to protect your income if you are injured and cannot work.

What cover levels do builders need?

Public liability usually starts at £1 million, while employers' liability has a legal minimum of £5 million, with most policies offering £10 million as standard.

The level of public liability you need is driven by the contracts you take on. Larger jobs and public sites often set the figure for you, so check the requirement before quoting for the work.

What is not covered by builders insurance?

The most common gaps come from policy exclusions and undeclared activities rather than from the covers themselves. Some tools policies only cover theft from secured locations, such as a locked van overnight, and some insurers exclude tools left in a van overnight unless the van is in a locked compound, so read the small print carefully.

Other mistakes that leave builders uncovered include:

• Assuming the main contractor's policy covers you when you are a subcontractor.
• Choosing the cheapest policy without reading the excess. A £500 premium with a £5,000 excess is no good if you cannot afford the payout.
• Failing to declare all your business activities. If you do roofing, groundwork and general build, make sure all of it is on the policy.
• Not updating your insurer when you hire staff. Taking someone on without updating your employers' liability cover could invalidate the policy.
• Not telling your insurer about high-risk work. Working at height, with heat or in restricted environments may need specialist cover.

How much does builders insurance cost?

Example premiums start from £120 a year for a sole trader with £2 million public liability and tools cover, and from £800 a year for a limited company with 5 staff and contract works cover.

Premiums vary depending on your turnover and business size, the types of work you do (general build versus roofing or groundworks, for example), where you operate, whether you employ staff, your claims history, and your tool values and plant hire. Speaking to a specialist helps make sure you are getting what you need and not paying for what you don't.

Is builders insurance a legal requirement?

Only employers' liability insurance is a legal requirement, and only if you employ staff. It applies under the Employers' Liability (Compulsory Insurance) Act 1969 to anyone you employ, including apprentices, labour-only subcontractors and part-time workers, with a legal minimum of £5 million of cover.

Public liability is not required by law, but most builders carry it to protect against third-party claims, and it is often a condition of working on large jobs or public sites. If you are a sole trader working entirely alone you may not need employers' liability, but you still need cover for tools, public liability and contract works.

How do I compare builders insurance quotes?

Quote Goat gives you access to a comparison service: you complete one short form and a specialist tradesman insurance partner contacts you with quotes. You will be asked what type of building work you do, whether you have staff, the value of your tools and your estimated annual turnover.

Specialists have access to schemes and other relationships that are not available through online-only tools, and speaking to one means you can draw on their expert knowledge when deciding which covers and levels you actually need. Whether you are laying bricks, converting lofts, managing extensions or tackling entire new builds, the aim is cover that protects your business properly. You can also compare other trades on our tradesmen insurance page.