What is Contractors Insurance?
As a building contractor, there are lots of risks you face; from the physical work you do, the sites you work on, to keeping your materials, tools, equipment, staff and members of the public safe. There is a lot to think about and there are a lot of health and safety hoops to jump through to get your job done.
A Contractors policy (sometimes known as Contracts All Risks or Contractors Combined) is a one-stop comprehensive insurance policy that combines lots of different covers under one policy, for one single premium.
Theft, loss or damage could really set you back from carrying out your contracted work – so this policy can provide cover for contract works, tools cover, own plant and equipment, hired-in plant, materials, physical loss or damage to building works and public and employers liability insurance. It gives you the ability to choose the specific cover you require to meet your specific needs.
We deal with all claims for you and have a high success rate in getting claims paid. We have been particularly successful sorting claims for stolen plant machinery which continues to be on the rise.
What can Contractors Insurance cover?
Depending on your specific needs, these are the main elements you typically find in a Contractors policy;
- Cover against insured perils of fire, flood, storm, escape of water, impact, vandalism, malicious damage, theft.
- Contract Works – cover for work that is underway on a site. It can pay to repair or reinstate the work that’s in progress if it’s damaged by an insured peril.
- Loss, damage or theft of tools, own plant machinery and equipment, hired-in plant and materials.
- Cover for damage to structures/buildings including temporary buildings and storage.
- Public and Employers liability insurance.
- Business Interruption.
- Important documents destroyed by fire.
- Legal expenses in case your company has to defend itself in a commercial dispute.
- Cover for insured items whilst in transit.
- Demolition and site clearance costs following a major insured event.
- Engineers or other professional fees incurred during the investigation of repairs.
- Costs associated with the clearance or cleaning of drains.
- Extensions can be added, (i.e. JCT 21.2.1 / 6.5.1 this provides cover for vibration damage to a neighbouring property where foundations are being dug within 2.5 meters of that property)
- If a Joint Contracts Tribunal (JCT) contract is being used it is imperative the correct options are chosen and should be consulted with your broker to make sure the options and cover are aligned, otherwise you run the risk of not being sufficiently covered.
What else do I need?
- Professional Indemnity: If you carry out or are responsible for any design work (even if you pass the design work to a third party, but you have ultimate responsibility), also known as errors & omissions.
- Excess Layer: If you require a higher limit for Public Liability or Employer’s Liability.
- Cyber Insurance: If you hold client data (paper or electronic), use emails, have a website, take online transactions.
- Fleet Insurance: If you have a fleet of vehicles registered in your company name.
Why do I need Contractors Insurance?
Legally you don’t need Contractors Insurance, but you should have it. The only element that is mandatory is Employers Liability. If you’re fortunate enough to have surplus cash to cover a worst case scenario, the time and expertise to sort a claim then you probably don’t need this policy.
But if like most people, you would prefer that a claim didn’t directly hit your bottom line and could do without the stress, or time vacuum of dealing with a claim, this policy is worth every penny.
What periods of cover do you provide?
- A Single Contract Policy will provide cover for the specific duration of the project you want covered, plus any contractual maintenance period.
- An Annual Policy will cover any and all projects completed during the 12 month period of the policy. Cover is based on your highest single contract.
Do I need to insure temporary site structures?
Yes. Temporary site buildings can be included in a Contractors All Risks (CAR) policy, for example a temporary office, porta cabin or storage container/s.
How much cover do I need?
The amount of cover will depend on the highest contract value that will be undertaken during the policy term. Say you have 5 contracts on the go at the same time, you would need to cover your largest contract. i.e. one contract at £500,000 and 4 contracts at £400,000 you would need £500,000 cover for contract works.
Types of businesses we can cover
We can provide cover for any type of contractor that has their own plant, hired plant or tools they require insurance for. Below are just a few examples
- General Builders
- Building Contractor
- Property Developers
- Plumbing and Heating Engineers
- Painters and Decorators
- Property Maintenance
- Civil Engineers
Contractors Insurance Claim Examples
Our client had 9 items of plant machinery stolen from their van whilst they were on site. The van had not been vandalised but had been broken into using key fobs (which is becoming more common). Items stolen included; chainsaws, mowers and an iPhone. We handled the whole claim for the client which was settled for £4,000 with an excess of £750.
The biggest challenge with this was providing receipts for the stolen items. It is worth noting that plant cover is on an indemnity basis which means insurers will usually make a deduction for wear and tear for tools and plant over 2 years old.
Our client had a skip loader stolen from their building site. To make matters worse, the plant was owned by a hire company (you are usually responsible for the insurance for any hire in plant).
The claim was settled for £12,000 for the replacement plant and included the hire charges which the client had to continue to pay until the hire company were fully reimbursed for the item. A loss adjuster was appointed, whom we met onsite and the claim was settled within 4 weeks of the meeting.
Our client had to make a claim when someone stole the cladding material that they were intending to use for a building they were working on at the time. This was stolen from a locked site.
The claim was settled for £5,000 within 2 weeks from the meeting with the loss adjuster onsite. We handled the whole claim for the client, including meeting the loss adjuster on-site.