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From building roads and major infrastructure, to constructing office blocks and private homes, the UK construction sector is a round-the-clock, all-weather industry worth £billions every year. However, with big business, also come big risks, many of which have the potential to deliver large financial claims if things should go wrong. Fortunately, construction insurance is available to mitigate the risks. Use it to provide a cushion against claims, support your business continuity and give yourself peace of mind.
Construction insurance is an umbrella term for the various types of business insurance that construction companies, contractors, builders and self-employed tradespeople buy to protect themselves from risks common to the UK construction industry. This includes protection to cover personal injuries or fatalities, loss of equipment and tools, damage to or theft of vehicles or plant and machinery, plus errors and omissions claims, data leaks, and general business disruption risks.
Construction insurance provides financial cover if someone makes a claim against you, or your business suffers loss, theft or damage to your property while you are insured.
Policies typically run for three, six, or twelve months and you select the types of cover you want and the sum of money you are insured for. Construction businesses with higher turnover and more employees will usually need more cover. The same rule will apply if you work in a high-risk area of construction where there is more risk of personal injury, or damage to or loss of your own or someone else’s property. Keep in mind that higher cover will mean larger premiums, so it is essential that you choose the right policy for your business. (If in doubt, seek expert advice).
Construction insurance comes in all shapes and sizes. The specific types and amounts of insurance contractors, builders and self-employed tradespeople need will vary according to the nature of the work they do and their contractual obligations.
Important construction insurance includes:
Public liability insurance protects your construction business if someone is injured, or their property is damaged because of the services that you or your business provides. This type of cover, also known as PL or liability insurance, is designed to protect construction businesses against third party claims for injuries or property damage from a customer or client, passer-by, or a visitor to your business premises – including building sites – whether you’re at fault or not.
Under the Employers Liability Act of 1969, Employers’ liability insurance (EL) is a legal requirement for most UK employers. EL protects you and your employees, (including those who no longer work for you), should they be injured or become unwell as a result of working for your business. EL typically covers the associated legal and compensation costs, and other damages of such events, but it can also cover accidental injury or damage caused by an employee to a third party, like your customers.
Professional indemnity insurance, also known as ‘professional liability insurance’, is an essential type of cover for construction businesses that advise clients, such as chartered surveyors, architects, designers, and materials specialists. Professional indemnity (PI) can protect you if a client makes a financial loss because of your work and then makes claim against your business. Trade associations, government bodies, public institutions, and major customers will often require proof of a minimum level of PI insurance before contracting business out to you.
Tools insurance, also known as portable equipment cover, protects the machinery and equipment you take from job to job. This includes things like hand and machine tools, generators, lighting rigs, tech devices, ladders, and testing equipment. The portable nature of these essential items makes them more prone to loss, theft, damage, and accident, and their replacement can often be expensive.
The potential for accidents, errors and omissions on any construction project is high. As well as protecting against claims resulting from accidents, theft, and human or machine errors, construction businesses, builders and the self-employed will also buy insurance to cover claims arising from…
Simple mistakes, faulty designs, unexpected problems – they can all put you at loggerheads with your customer, increasing the possibility of legal action that can financially impact your business, hurt your good reputation and create time-consuming distractions.
Power outages, technology failures, poor materials, lost tools and late deliveries can all affect your schedule, making you liable for late penalties, compensation claims from unhappy customers, buying fresh materials and equipment, and redoing work you thought you’d finished.
Just because they work in the physical world, that doesn’t mean construction businesses are immune to data problems, cyber-attack or technology failure. Making online payments, processing orders and invoices and communicating with clients electronically creates the real risk of a confidential data leak. This type of issue has the potential to deliver the biggest compensation claim and the most damage to your business. Data insurance can eliminate the risk of financial calamity and help your organisation to recover quickly from any data breach.
Construction insurance can protect you from:
Premiums for construction insurance can start at less than £5 per month, but costs will depend on the size of your business, the number of employees you have, the level of risk attached to what you do, the amount of cover you choose and the limit of your policy excess.
All business involves risk, but that doesn’t mean you have to suffer the consequences if things go wrong. Contact Swoop today to compare top-quality construction insurance policies and to discuss all your business insurance needs. Don’t let an accident, mistake, or omission wreck the business you’ve worked hard to build.
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