Construction insurance is not a policy, it is a shelf of them, and a building contract usually names three or four by their proper titles. Getting the words right matters more here than in any other trade, because the contract allocates each cover to a named party and a firm that turns up with the wrong one is either uninsured or paying twice. This page sorts the shelf into what each policy does and who is normally expected to hold it.
The liability pair, which everybody holds
Public liability answers for injury to third parties and damage to their property; employers' liability answers for injury to your own people and is compulsory once anybody is employed. On a managed site both are required by the contract at limits the principal contractor names, commonly five million pounds and sometimes ten. A labour only subcontractor is generally treated as an employee for the second of those, which is where firms most often discover they needed a policy they had not bought.
Contract works, which the contract allocates
Contract works, also sold as contractors' all risks, covers the works under construction and the materials for them until handover. Standard building contracts say explicitly whether the contractor or the employer insures the works, and both allocations are normal: the contractor on a new build, the client through their own buildings policy on an extension. Reading that clause before signing is the entire job, because each party assuming the other holds it is how a half built extension ends up uninsured in a storm.
Plant, tools and hired in equipment
Owned plant, hired in plant and employees' tools are three separate sections and a hire agreement will make you responsible for the second whether or not you insured it. Excavators, towers, generators and site accommodation are the usual hired items, and the hire company's terms typically pass both damage and continuing hire charges to you. Those continuing charges are a specific extension rather than part of the damage cover.
Professional indemnity, which more contractors need than think so
A contractor who designs, specifies or certifies any part of the works has a professional exposure, and design and build contracts make that explicit by transferring design responsibility down the chain. Where the contract says design and build, the insurance question is not whether professional indemnity is needed but at what limit and for how long after completion, because the requirement usually survives practical completion by years.
Questions people ask about construction insurance
What insurance does a construction company need?
Public liability at the limit the contract names, employers' liability once anybody is employed, contract works where the contract allocates the works to you, plant and tools cover for your own and hired equipment, and professional indemnity wherever you carry design responsibility.
Who insures the works, the contractor or the client?
The building contract says, and both are common. New builds usually put it on the contractor; extensions and refurbishments often sit with the client's own buildings insurer. It is the clause to read before signing rather than after a loss.
Is CDM 2015 an insurance requirement?
No. The Construction (Design and Management) Regulations impose health and safety duties on clients, designers and contractors. The insurance requirement comes from the contract, and a claim is investigated against how those duties were discharged.
What limit do construction sites require?
Five million pounds is the common figure on managed sites, rising to ten million on larger projects and on work near rail, utilities or the public highway. The principal contractor checks the certificate before admitting anybody.