Builders insurance is sold as a package and bought as a habit, which is why so many building firms hold the liability section and nothing else. For a firm working on people's houses the liability cover is the smallest part of the exposure: the larger risks are the half finished job, the neighbour's property, the tools in the van and the week the site is shut after a fire. This page is about what a domestic builder is actually carrying.
The liability core, and the limit domestic work needs
Public liability answers for injury and damage to third parties, and employers' liability is compulsory as soon as anybody is employed, including labour only subcontractors working under your direction. One or two million pounds suits ordinary domestic work; five million is the figure main contractors and housing associations require, and it is worth carrying if that work is in your plans rather than discovering it on the morning of a site induction.
The neighbour, and the Party Wall Act
Domestic building work next to another home produces the most predictable claims there are: cracked drives, damaged fences, a party wall opened up. The Party Wall etc. Act 1996 governs notice and procedure for work on or near a shared wall, and following it is not insurance, it is what keeps the argument about damage from becoming an argument about whether you should have been there at all. Liability cover then answers for the damage itself where you are responsible.
Work in progress, which liability does not touch
The extension you are halfway through is your risk until handover, and public liability does not answer for it. Contract works cover does, along with materials on site. For a small builder this is the difference between a bad week and a business ending week, because the cost of rebuilding a partly finished job falls entirely on the firm that was building it.
Tools, the van and the honest sums insured
Tools sections carry a total sum insured, a single item limit and conditions about locked vans and overnight parking. Builders are also the trade most likely to be underinsured on tools, because the figure was set years ago and the kit has grown. Add up what a full replacement would cost this year rather than what the policy has said since the firm started.
Questions people ask about builders insurance
How much does builders insurance cost in the UK?
Insurers that publish a starting price for business liability put it in single figures per month for the lowest risk case, and a building firm with employees, tools, contract works cover and a five million pound limit pays a multiple of that. The record on this site shows what each insurer prints and which print nothing.
What insurance do builders legally need?
Employers' liability, once there are employees, under the 1969 Act. Public liability is not a legal requirement but is a practical one: main contractors, housing associations, letting agents and most clients require it before work starts.
Does builders insurance cover the work I am building?
Not under public liability. The works in progress and the materials on site need contract works, sometimes sold as contractors' all risks, which is a separate section and is missing from a lot of cheap trade policies.
Are subcontractors covered by my policy?
Labour only subcontractors are generally treated as your employees for employers' liability purposes. Bona fide subcontractors run their own businesses and should carry their own cover, and most builders now collect certificates because their own insurer expects it.