Builders indemnity insurance is a phrase that reaches for three different covers. Most often somebody means professional indemnity for design work. Sometimes they mean contract works cover for the job itself. Occasionally they mean a structural warranty on a completed building, which is a different product again.
Professional indemnity, for design
A builder who designs as well as builds, or who takes design and build responsibility, carries design liability and needs professional indemnity for it. A builder working strictly to somebody else's drawings usually does not, which is why many builders have never needed it and are suddenly asked for it on a design and build tender.
Contract works and public liability, for the job
Contract works covers the works in progress against fire, flood, storm and theft before handover. Public liability covers injury and damage to third parties. Employers liability covers your people. These are the covers a building job needs regardless of who did the design.
Structural warranty, which is not insurance you buy for yourself
A latent defects or structural warranty covers the completed building for a period after handover, and it is usually required by lenders on new homes. It protects the owner rather than the builder and has to be arranged before work starts, which is the thing developers most often discover too late.
Questions people ask about builders indemnity insurance
Does a builder need professional indemnity?
Where they design or take design and build responsibility, yes. A builder working to somebody else's drawings usually does not.
What is contract works cover?
Cover for the works in progress against fire, flood, storm and theft before handover. It is separate from liability cover.
Is a structural warranty the same thing?
No. It covers the completed building for a period after handover, usually for a lender's benefit, and must be arranged before work starts.