Home Insurance and Building Work
Whether you have bought a property to ‘do up’, or you’re planning to do some renovation work on your home you should always make sure you have the right insurance in place. You must think about protecting your property and the public. You can’t assume that standard home insurance will cover any type of damage or incident.
This article is for guidance only. It is important that you take the advice of your insurance broker as this can be a specialist area, especially if there are major structural works or the property is vacant.
Does my house insurance cover building/construction work?
Not always. We understand that most home insurance policies will only cover for general decorating and DIY as it keeps the premium lower. If you are having major building work, like a loft conversion or an extension, you may need to take out additional cover. Always read your policy before conducting any work to make sure you are covered.
Will my insurance cover for accidental damage if I am undertaking DIY?
Some policies do, and others do not. It depends what cover you have taken out when you bought your insurance. We’d suggest you check with your insurance broker and make sure you have appropriate cover. Your home insurance may not provide cover for personal accident or injury either, and don’t forget that accidental damage to contents will most likely be on a different policy to your buildings cover. Triple check and check again, and if in doubt, speak to your insurer in the first instance before carrying out work.
My house will be empty whilst I renovate. Do I still need insurance?
Yes. Insurance for building projects often isn’t about covering the people inside the property, but about the works being undertaken, the expensive equipment and materials being kept at the property, and also the risk of damage to neighbouring properties. While the contractor’s equipment and materials may be covered by his insurance, what about the very expensive kitchen or bathroom fittings you have had delivered to the site? These may need to be insured by you as they may well be excluded from the contractor’s insurance. Check with your insurance broker.
If you will not be living in your property for 30 or 60 days or more, then you should look at additional insurance cover for the work. You will almost certainly need to tell your insurer at the very least, because an empty property has different insurance requirements anyway.
Do I need to inform my insurer that I am doing building work?
For most building work, we always recommend you notify your insurers as this will be a change of circumstance. You may not realise it, but even work such as erecting a scaffold to decorate your house results in a notifiable change of circumstance as it may make upper floor windows accessible to intruders, thereby changing the risk an insurer is covering.
Does home insurance cover damage caused by my builder or other contractors?
Do not expect your builder’s work to be covered by your own house insurance. Very many policies contain a clause like this one: ‘Contractors Exclusions Clause’. This insurance excludes loss, damage or liability arising out of the activities of contractors.” It means that if you’re building an extension and your contractor damages your house or property, you are unlikely to be able to claim from your own house insurance and would need to make a claim against the contractor. The same applies if the builder damages your neighbour’s house or property.
It is your responsibility to check that your builder has the right insurance and that it is valid and in date. Ask them for a copy of their certificate and check the date and any exclusions. If it goes out of date during your work, ask them for confirmation of renewal. Don’t just trust ‘fully insured’ written on their letterhead or website.
If you have used a formal building contract, this should state the insurance requirements. If in doubt check with your insurance broker. You should always ensure that insurance is in place that is appropriate to the risk and the work, and which provides cover for negligent and non-negligent actions by a contractor.
Can I get specific building works insurance?
There are many specialist insurances available including that for work on your property whether you are living in it or not. Always talk it through with an insurance broker and make sure you have the full project specifications covered.
Does a Party Wall Agreement agreement provide insurance for damage to neighbouring property?
No. Let’s take a case where the work is covered by a Party Wall Award drawn up under the Party Wall etc Act 1996. That places a direct personal liability between the building owner (doing the work) and the adjoining owner for any damage arising. There is no liability arising directly upon your contractor and the party wall award cannot create one.
For example, you build an extension and during the work some damage occurs next door. The party wall surveyors agree it’s caused by your work and that a financial recompense is appropriate. The liability for that damage and recompense rests directly with you. It may be that you have some specialist insurance cover, but if not you will need to settle the claim personally. Of course you may think that the contractor should pay for the damage but that will be a contractual matter between you and your contractor and their insurers. That is why it is critical to check their insurance at the outset.
The bottom line is that when there is damage arising from your building work, it is you who has the liability and you who will have to take action against the builder. Even then if he goes bust or ceases trading, you may well be left holding the baby, so to speak.
All is not lost though. There are some providers of specialist party wall insurance, although the market is limited.
Does my home insurance cover for failure to complete the work?
Again, you will need to check with your policy provider or an insurance broker. If your building work means you need to rent a property to live in whilst works complete you must consider whether you could afford to continue renting as well as paying your mortgage, if the work ceased or was significantly delayed. You will need to make sure any insurance covers this eventuality.
There are a number of scenarios where work might cease unexpectedly. Your contractor simply cannot complete works because they go bust, suffer an injury, or (at worst) pass away unexpectedly. You are now in the situation that you need to switch contractors mid-project causing yet further delays.
If you do need to switch contractors you will need to ensure continuity of insurance. If you sack a contractor it is probable that their contractual obligation to insure stops immediately. Similarly if a contractor ceases trading, you must check whether their insurance is continued or cancelled.
If it takes a while to get a new contractor and restart the site you will also need to arrange insurance for the interim period.
Remember, in all cases, check your policy before you start building and construction work. Always speak to your insurance company, or an insurance broker, if you are unsure.
If you need any help or support with project management of building works, or party wall agreements, get in touch with us via the form below.
Steven Way
Steven Way BSc MIHEEM MFPWS MRICS is the Practice Principal and is a Chartered Building Surveyor. With over 35 years as a practicing surveyor, Steve has a wealth of experience and expertise in both residential and commercial building surveying, party wall advice and disabled access auditing. He has also built his reputation as an expert witness.