It Pays to Have a Customisable Builders Insurance Policy

A builder is more than a person with a set of tools, some know-how, and a piece of land to work on.

A modern builder is an entrepreneur, a risk-manager, a HR department and a project management suite all combined into one. Oh, and did we mention they occasionally build things?

Whether you agree with the approach or not, the reality is that Governments, Councils and sector regulators have increased the level of rules and regulations for builders almost every year in the last decade. 

Above and beyond this rising baseline of legal requirements, clients are becoming more demanding. When putting out requests-for-tender documents, clients are picking builders based upon optional credentials such as:

• Industry initiatives like the Considerate Constructors Scheme
• Training and quality certifications held by the builder
• Policies and procedures for dealing with disputes
• The treatment of suppliers, such as whether the builder has subscribed to the prompt payment practices code, and whether they make use of Small or Medium Enterprises (SMEs)

The list is endless. And with this expanding complexity, the business of building becomes more and more vulnerable to single points of failure that can bring these often delicate businesses tumbling down. 

What can go wrong

As with any industry that relies upon contracting, contracting and more contracting; disputes are common. Clients are often ambitious and set challenges for their builders which are difficult to accomplish under a tight budget. These budgetary constraints can lead to corners being cut. The subcontracting model can sometimes diffuse responsibility to the point where a quality failure becomes a contentious dispute which begins incurring legal costs. 

Building sites are also dangerous places of work. The Health & Safety Executive published their 2021 report recently, which stated that over 74,000 personnel are currently suffering from ill-health as a result of their work, and 39 workers regrettably lost their lives on British construction sites during that same year. 

If such an incident occurs on a construction site managed by your build firm, what would happen next? After the initial period of shock and grief, the financial consequences would begin to emerge. No amount of money can compensate a family for the loss of their loved one, but a significant amount of money will likely be needed to support them for the rest of the lives and replace the lost income. 

These scenarios are almost unthinkable, and yet as a building industry we must consider them because all risks, if properly considered, can be reduced or eliminated through better working practices and awareness. 

Because no risk can ever be reduced to zero, builders insurance policies exist to protect building firms against legal claims, theft and other incidents that might otherwise lead to the collapse of a firm.

Why builders need to be able to customise their cover

Every project is different and every builder is different. 

As we described above, the building business has become so complex that no two building firms look alike. 

With a different mix of clients, resources and legal risks, each firm has a different set of priorities when it comes to taking our builders insurance: 

Builder’s indemnity – Builders engaging in ambitious projects that involve new technology, risky designs and other parties with questionable ethics may wish to protect themselves against claims of negligence at a later date if things go wrong. This is the objective of builder’s indemnity insurance. 

Fear of theft – Depending on whether you rent or own your tools and machinery, and where you are based, the fear of theft may loom large in mind when you consider your insurance needs. 

Cyber & data cover – Many builders are digitising their business to improve productivity and reduce overhead. This can involve using software-as-a-service to project manage or monitor the costs of projects and interact with construction professional service firms. This new tech brings new risks, therefore builders may wish to add cyber cover to protect them against the costs of recovering lost data or being hacked by a malicious third party.  

Customisability is about ensuring that the insurance policy you spend your money on, is perfectly aligned to address the risks that you personally worry about. If you’re going to commit to paying a fee each year, you want to ensure that in exchange you will get maximum peace of mind in exchange.