Why do builders need builders' professional indemnity insurance, you might ask?
In fact, the answer is quite simple and straightforward. Any building contract involves not only the physical process of construction but very often the provision of advice to clients, the preparation of designs and drawings and the calculation of detailed specifications.
At any one of these stages, you might make a mistake and unwittingly act – or fail to act – in a way that results in substantial financial loss to your client or even to the injury or death of an individual suffering the consequences of your error. In those circumstances, you may face very substantial claims for compensation from the parties who have suffered any loss or damage.
The claims may be so substantial, in fact, that it proves more than difficult for your business to meet the demand for compensation or for you to pay such damages from your own pocket. If that happens, your building business may be facing financial ruin and your reputation could be in tatters.
At constructaquote.com we specialise in the provision of builders’ insurance, which offers indemnity against claims alleging negligence in the way you have conducted your business.
The builders’ professional indemnity insurance we arrange may be offered to accommodate precisely the kinds and scale of contracts on which you intend to be working – whether you are a sole trader or the owner of a sizeable building company.
Why choose us for your builders' insurance needs?
- We specialise in the provision of all kinds of insurance cover for hundreds of trades
- Since 1990 we've been using our insurance experience to help you find the cover your business needs
- Our contact centre is based in south Wales and our friendly staff are ready to help with your insurance needs
A closer look at builders’ insurance
When you undertake work as a builder, your customer expects you not only to carry out the physical task of constructing the agreed works, but also for a constant stream of advice and recommendations about the project – not just at the outset, but throughout the course of your work.
As a responsible builder who takes pride in his work, of course, you aim to make sure that any such advice you give is designed to produce the best results and in your client’s interests.
If the outcome falls short of those best results and your client claims that the failure is the result of erroneous, misjudged or mistaken advice on your part, he may seek redress by claiming that you were negligent in the advice and opinions you gave.
At issue is a questioning of your professional duty of care and an allegation that you have in some way breached that duty, thus the claim is made.
Builders’ professional indemnity insurance is designed to protect you against the financial impact of such claims by meeting the amount of compensation you are ordered to pay.
Public liability insurance
Professional indemnity is not the only liability typically covered by builders’ insurance.
Equally important – and equally capable of making a very substantial dent in your company’s finances – is the issue of public liability. As the term suggests, this widens your general duty of care to embrace any member of the public, any customer, any supplier or other visitor to your building site.
Your duty is to take all reasonable precautions to prevent them being injured or sustaining any loss or damage to their property. If that occurs and they hold you in breach of your duty of care, you may be ordered to pay substantial compensation.
Public liability claims may reach such proportions that it is usual for builders’ insurance to provide indemnity of at least £1 million.
Employers’ liability insurance
You also have a similar duty of care towards anyone you employ to help on your building projects. If any individual employee suffers an injury or contracts an illness or other medical condition caused through their employment, you may be held liable and, again, ordered to pay a substantial sum in compensation.
An important difference and notable feature of employers’ liability insurance, though, is that you have no option but to arrange it – if you have any employees. The Employers’ Liability (Compulsory Insurance) Act 1969 imposes a legal obligation to hold a minimum of £5 million of cover to settle any claims successfully brought by an employee. You may face fines of up to £2,500 for every day that you fail to arrange sufficient cover and might also be fined up to £1,000 for failing to display the relevant insurance certificate.
Although the minimum legal requirement is for £5 million of cover, the builders’ insurance we arrange here at constructaquote.com offers £10 million of cover as standard.
What to find out more about builders professional indemnity insurance? Then please get in touch with us today for a no-obligation chat.