Why do builders need business insurance?
Construction is one of the largest industries for the UK economy with over 9% of the workforce employed. With such a large industry there are plenty of risks to consider when you start a construction business.
With that in mind, it becomes easy to see why having business insurance is important for construction businesses. If your business causes accidental damage or injury for a third-party, or if an employee gets injured then you’ll need business insurance to help with the any claims. Without it, you’ll be left to handle the costs out of your business’ pocket.
As well as the costs of claims, you should also consider the cost of replacing any damaged tools and equipment – either your own, or that you’ve hired – or the cost of damages to any of the works that’s currently under construction.
All of these risks and more can be covered under your business insurance policy.
How much does builders’ insurance cost?
Every business has different needs and factors that will affect the price you pay. From the type and level of cover your choose, to the type of work you’re carrying out – there are several things that play a part in your premium.
On average, AXA customers pay £79* a year for business insurance. However, this will vary for every business.
The best way to find out what your premium will be is to get a quote – this way you’ll know what your policy is likely to cost based on your business’ specific situation. Plus, get your quote online and you’ll get an automatic 10% discount**.
Find out what your policy costs below.
What covers to builders need?
With AXA you can pick which covers you want to take out to build your bespoke business insurance package. This way you’re only ever paying for the covers you need.
Here are the main covers you may want to consider.
Public liability insurance for builders
Public liability is there to protect you from claims made against your business by third parties for cases of accidental injury and/or damage.
Here are a few scenarios were public liability insurance could be an invaluable investment for your business:
- You’re clearing the space for your building and someone trips on the uneven ground and gets hurt
- You’ve working on an extension, but your work has weakened another part of the building. As a result, someone has gotten injured when part of a wall collapsed.
Employers' liability insurance
Employers’ liability is a legal requirement under the Employers’ Liability Act 1969 if there is anyone working for you. This doesn’t just apply if you have full and/or part-time employees, but also if you have:
- Laborers you hire
- Temporary staff, apprentices, and volunteers
- People taking part in work experience or training schemes
It covers you if anyone in your employ falls ill or gets injured as a result of working for you. It will help you cover the cost of compensation or medical costs.
Tools insurance
Tools insurance comes in two forms: Own plant tools and equipment and Hired-in plant tools and equipment. Both covers offer protection for your tools against accidental damage and theft.
The main different here is that own plant tools and equipment covers tools that your business owns, whereas hired-in plant tools and equipment covers any larger tools or pieces of equipment you’ve hired to use for a specific job.
As a builder, what additional covers can I get?
There are several optional additional covers that you may want to add to your policy package to ensure that you are getting comprehensive cover for your business.
If you feel like you need a little more cover, we have a selection of additional covers that you can add to your policy.
Contract works cover
If you’re building a new house or extending a property, and the work you’ve done is destroyed or damaged part way through the job, you could lose all the hard work you’ve put in. But with contract works cover, we’ll protect you against accidental loss, destruction, or damage – so you can complete the project you’re working on.
Legal expenses
This cover is there to help if you find yourself in need of legal help. There’s a broad range of cover included to handle costs of a legal dispute either made by or against you.
From an issue with a supplier contract, an employment dispute, property damage or a personal injury claim, our legal expenses insurance will help protect your business from the huge expense of professional fees.
Van insurance
As a builder, you’re going to have tools, equipment, and materials that you need to move from point A to point B daily. So, if you’re using a van to transport things back and forth then you’ll benefit from having Van insurance to protect you when you’re on the road.
With AXA van insurance you’ll be covered for a variety of scenarios such as: Loss or damage relating to theft or fire, broken windows and windscreens, mis-fuelling and more.
Is it a legal requirement for builders to have business insurance?
In the UK, business insurance is not a legal requirement.
However, there is one exception to this which is employers’ liability insurance. If you have anyone working for you – regardless of the capacity in which they work for you – you are legally required to have employers’ liability under the Employers’ Liability Act 1969.
There are some cases where your client may require you to have insurance. Some examples of these types of clients may include local councils or businesses.
Do self-employed builders need insurance?
Yes, builders who are self-employed need business insurance. If you’re interacting with the public in any way, then you need insurance.
The main distinction between these two of builders and their policies is that a self-employed builder is likely to be working on their own and therefore won’t have any employees. If you don’t have any employees, you won’t need employers’ liability insurance.
Frequently asked questions
Is business insurance for mandatory for builders?
Business insurance is not mandatory. However, some contracts may require you to have insurance in place before undertaking a job.
If you have anyone working for you – regardless of their employment status – then you are legally required under the Employers’ Liability Act 1969 to have employers’ liability insurance.
How long does my business insurance last?
When you take business insurance with AXA your policy will last for 1 year from the policy start date.
Does builders’ insurance cover poor workmanship?
No, business insurance will not cover you for poor workmanship. Depending on the cover you choose, business insurance will cover you for:
- Third party claims made in relation to accidental injury or damage with public liability
- Theft or loss of your tools under tools insurance
- Claims made by an employee who has fallen ill or been accidentally injured as a result of working for you
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*10% of our customers paid this or less between July and September 2023.
**This discount is applied automatically and lasts for the lifetime of your policy.