What type of insurance do builders need?

8 Mar 2016

There are three types of insurance every trusted installer should have in order to protect both parties in the unlikely event that anything goes wrong.

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The home improvement industry is becoming more and more subject to scrutiny. Homeowners want to be assured that the company undertaking work on their property can be trusted, and rightly so! As a result, it’s becoming increasingly important for reputable builders to meet the required guidelines and standards put in place to protect both parties.

No matter what type of cover the homeowner may already have, it’s important to ensure that any builder is appropriately insured. There are three types of insurance every trusted home improvement company should have:

1. Builders public liability insurance:

Protects against third-party injuries whilst work is carried out on the property. If a passer-by is hit by a slate that falls from the roof, you are protected should you be considered liable. This also protects neighbouring properties from possible damage. Put simply, it covers anyone not directly involved with the home improvement process should they be wronged.

2. Employer’s liability insurance:

A legal requirement for limited companies. It protects all parties in the event that an employee undertaking home improvement work becomes injured as a result of installation or fitting. Plenty of sole traders (whilst they may be genuine) forgo this cover. As a result, the homeowner is at risk of becoming litigated, through no fault of their own.

3. Installer’s all-risk cover:

Believe it or not, a third of all operating builders often forget about this type of protection. This risks giving homeowners huge financial bills. It simply covers work carried out by the builder that is accidentally destroyed. This could be before completion or before the homeowner has a chance to extend their policy to cover it. This form of cover is often overlooked, and while it may not seem important, why take the risk?

4. Professional indemnity insurance:

Professional indemnity insurance is invaluable to any contractor. It can help you in the event of a client claiming you provided inadequate services or advice. Professional indemnity insurance will cover the legal costs and expenses that occur during the process of defending the claim. It also offers compensation payable to the client if you need to rectify a mistake.

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General tips people should consider when choosing a builder

  • Never underestimate the power of an all-risks certificate. Any reputable installer should have one and it will display the above forms of cover.
  • An IBG (Insurance Backed Guarantee) protects both homeowners and installers. In the event of company liquidation, finances will always be safe.
  • Sub-contractors should be a warning sign. Any reputable company should:
  • Check for trade association membership. Does your company belong to a professional body or trade association such as FENSA or the CPA?
  • Agree on written quotes from the outset before any work is carried out. Work out a project schedule.
  • Ensure that the home improvement company is registered. And on the recommended list of installers from the house insurer.
  • Honest and reputable builders will strive to gain as much feedback as possible in order to build their reputation.

The CPA: Protecting the rights of installers and consumers and specialists in builders insurance

At the CPA we only deal with proven and accredited tradesmen. We fully vet them for professionality and trustworthiness. If these qualities represent your service or home improvement company, contact us about achieving accreditation today. It may help gain you that all-important edge when proving to customers that you care about providing the correct protection!