Why Investing In Self-Build Insurance Is Your Safest Bet?

Posted by SELF BUILD INSURANCE on September 18th, 2022

You have decided to take the next big step in life- build a house. Congratulations! You have invested in a plot and are eager to begin building. Don’t be in a hurry. Stop to consider! Your next most important step is to invest in an insurance policy. This is extremely important as an insurance policy could help you, especially during an unexpected situation.  

What is a self-build insurance policy?

Also called a site insurance policy, it is a specially customised policy/product that covers your building plot, you, builders (masons, carpenters, plumbers and anyone else involved) and includes coverage for your building in various stages of construction.

A top-notch provider will account for –

1. Contractors’ all risk- this aspect of the policy covers you from mishaps like theft, natural disasters, fire etc.
2. Contract works- the part of the policy that will cover the cost of replacing or repairing a part of the structure
3. Public liability- loss or liability suffered by members of the public (even trespassers). It will also protect external parties from injury caused due to activities on the site.
4. Employers’ liability- the contractor and anybody else working on your site is deemed an ‘employee’ and insured accordingly.
5. Legal expenses – this is used when action needs to be taken against third parties. It is included by the site insurance providers and could be an additional cover for cases as mentioned above.

Self-building is an exciting but nerve-wracking enterprise. There are multiple risks of damage to property and injury to personnel. Theft and damage are two important issues faced by property-holders. A self-build site does not necessarily have access to round–the–clock security like a large-scale developer. This means that tools or materials could get stolen. At times, a natural phenomenon like a flood can wreak havoc.

A claim on your plot alone will not amount to a large amount of money, but it changes drastically if you are held responsible by trespassers. A sound policy/product should hence contain both employers and public liability. 

Many people assume that if their contractor/builder has a policy, there is no need to invest in one for themselves. This is not advisable. Assuming you purchase a few items on your own, and they get stolen- your contractor will not be able to claim them because they never purchased them in the first place. You did.

Normally, your contractor/builder may have some basic insurance coverage, but you cannot be completely dependent on it. As illustrated above, this also means that once they leave the premises during the night or it is the weekend, then your materials are not covered.

What happens next?

After your property has been built, the standard self-build insurance policy you took out can be converted to a standard homeowner's policy because the former covers only the construction phase and nothing beyond. It also makes sense to get a self-build warranty so that you can claim damages if there is any structural compromise in the future.