What insurance cover should a contractor have?
Ongoing workloads for construction SMEs remained remarkably resilient in the months following the referendum vote, suggesting that consumer demand – which accounts for the bulk of SME work – has held up far better than anticipated.
The results of the Federation of Master Builders’ latest state of trade survey perhaps explain why finding a contractor remains difficult for many businesses planning building work.
They also highlight the importance of ensuring that your builder – and in particular any contractor they use - has the correct type of insurance.
About 2.1 million people work in construction in the UK, according to recruiter Agency Central, with many operating as contractors.
Keeping any project on time, on budget and executed to the highest of safety standards are key objectives for any competitive builder. But, even the most competently, diligently managed construction projects are subject to accidents, project delays, errors or mishaps.
Getting to grips with the ins and out of your contractor’s insurance can help to protect your business from worst-case scenarios.
Few construction companies would be able to meet the cost of claims and payouts from their own resources, which is why it is advisable to check your firm has liability insurance cover.
This type of insurance includes the following essential cover…
This type of insurance covers contractors against accident or injury claims made by employees. It’s a legal necessity for contractors and they’re required to keep a certificate at their place of business.
Some insurers will cover against a set amount of damages, while others will provide unlimited cover.
If you injure a member of the public or an independent sub-contractor during the pursuit of your business or accidentally damage surrounding or third-party property, the public liability policy will step in to meet claims for compensation made against you. Furthermore it meets all legal costs in connection with settlement or defence of such claims.
Public liability will not only meet the cost of compensation claims, but will cover legal fees related to settlements or defence in terms of such claims.
Commercial vehicle insurance
Company cars, vans, lorries and licensed plant are required by the Road Traffic Acts to be insured for third-party liability both for injury and damage.
While the above are all necessities, there’s also a range of highly desirable cover options that many contractors have taken out. These include…
If anything happens to the equipment needed to complete the works, contractors can end up having to replace them out of their own pocket. As such, All Risks policies cover a broad range of equipment from fire, theft or damage – whether they’re on-site at the time or not.
Plant, machinery and tools all risks
This covers all the tools contractors need to carry out their job – from heavy plant to huts and hand tools.
Inspection contracts and plant protection
The Health and Safety at Work Acts require the periodic inspection by a competent person of all pressure plant and lifting equipment.
Each has to be checked that they are working to their safe working pressure or lifting weight to ensure safety of employees and the public from either explosions or loads dropping on them. All compressors, hoists, forklift trucks and the like must have inspection certificates before they are brought into use.
Structural insurance protects the homeowner from any failings in the workmanship, materials or design of a property once it’s completed. Despite potentially protecting against failings caused by or due to the contractor, the responsibility for sourcing cover falls on the developer and is a requirement for mortgage providers.
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