Builders’ insurance

Why do builders need business insurance?

Construction is one of the largest industries contributing to the UK economy and providing over 6% of the UK’s jobs. 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 to a third-party, or if an employee gets injured then you’ll need business insurance to help with the cost of 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 from £82^* 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.

With AXA you can pick which covers you want to take out to build your tailored 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’re 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 tools against accidental damage and theft.

The main difference 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.

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.

Yes, as an optional extra, you can add workshop cover to your builder's insurance policy. This covers the contents including tools, machinery, stock, and computer equipment at your premises. You can set a cover level tailored to your workshop’s value.

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.