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22nd August 2018

Construction insurance

Construction_Insurance_PolicyThe construction industry covers a broad spectrum of building projects and a wide variety of trades and tradesmen employed or contracted to work on them.

If you are involved in the construction sector, it is vital that your insurance cover gives you the protection you need, when you need it. The various types of insurance needed can be confusing, especially if you are hiring subcontractors on your project.

This is a list of some of the construction insurance cover available:
  • Professional indemnity
  • Public liability
  • Product liability
  • Employer liability
  • Contractors all risk
  • Structural warranty, latent defects, bond insurance and guarantees
  • Plant, machinery and tools
  • Business insurance for construction
  • Business interruption insurance
  • Legal expenses
These policies provide cover for companies, professionals and tradesmen involved in the construction sector such as architects, property developers, house builders and building products manufacturers.

Depending on your involvement and exposure to risk you can access all the cover you need; however, you may need help from expert advisers to ensure you are adequately covered for your particular business and project.

This is where construction insurance brokers can help. They can find the most suitable cover from a wide range of policies available from construction insurance companies, selecting the right one at the best price. For example, a tradesman working in the construction sector will need contractors all risk insurance, public liability insurance and plant, machinery and tools insurance. You may also want to consider personal accident insurance and possibly tailored insurance if your work involves specialist tasks or certain locations that are normally excluded from standard policies such as nuclear power stations. Employers’ Liability insurance is a legal requirement of any business employing staff, temporary workers or subcontractors.

Subcontractors
If you hire subcontractors, they fall into two categories; labour only subcontractors and bona fide subcontractors.

Labour only subcontractors
They will work under your supervision and you will be responsible for paying them and providing the tools they need for the job. These contractors will be covered under your Employers’ liability insurance.

Bona fide subcontractors
They will work under their own terms and hours to get a specified job done and will provide their own tools and be responsible for taking out their own Employers’ liability insurance.

If you are unsure of your legal responsibilities and which type of construction insurance cover you need, talk to one of our advisers on 0121 321 4600.
Construction_insuranceConstruction projects are prone to disputes due to their complexity and levels of uncertainty not usually found in many other contractual agreements.

Weather, labour, technical problems and defects can all play their part in taking your project into potential construction disputes with your clients.

Your construction insurance will cover you for a range of risks for the duration of the project such as:
  • professional indemnity,
  • public liability,
  • product liability,
  • latent defects, bond insurance and guarantees.
However, there may be elements within the construction contract that will need close attention to ensure your construction insurance remains valid.

Contractual notice requirements
A good example of this is contractual notice requirements. Construction contracts often include a “time bar”. Claims need to be made within the specified time and if you are disputing a claim, you will have to act within a certain period.

When entering into a contract, you need to be aware of these time frames and from a construction insurance perspective, check that any particularly stringent or onerous time bar clauses are allowed within your insurance policy.

Do you know what “The Protocol” means?
Claims at pre-action stage, before formal proceedings are issued, can use “The Protocol” to determine the conduct of construction claims. The intention is to resolve disputes early without the need for court proceedings.

A recent revamp in 2016 streamlined the process and though it is no longer compulsory, the submissions are less comprehensive meaning there are fewer steps to be followed before court proceedings are issued. As a result, you will need to engage early in the process and respond quickly to any claims made against you.

If you do find yourself involved in a claim, act quickly and notify your construction insurance company as soon as possible.

CLA provide support for all our clients involved in the construction industry:
  • Architects
  • Surveyors
  • Property developers
  • House builders
  • Civil engineers
  • Building trades
  • Building products manufacturers
Call 0121 321 4600 and speak to one of our Account Managers for more information.