Project Insurance FAQs for Self Builders & Renovators

If you’re in the planning stages of a home building project, insurance is an essential consideration. You have to ensure that you have the right cover in place before any work starts and throughout the project.

Adding site insurance to the cost of your extension or self build might not be something you’ve thought about or made a priority for your upcoming project, but you need to be thinking about it in the early stages so that you can budget accordingly.

1. Can’t I just rely on my existing home insurance?

Regular house insurance is not designed to cover building projects. In fact, it will usually specifically exclude alterations, renovations and extensions. It also won’t provide cover for unoccupied properties.

It is wise not to solely rely on your standard building insurance to cover the cost of any loss or damage as, more often than not, they will not pay out on a loss involving a property under development. In reality, you’ll need a specialist policy in place.

Everyone’s circumstances and projects are going to be different, which is why it’s really important that you seek expert advice from a site insurance provider before making a start on your build.

2. Surely my contractor’s insurance is enough?

Your builder may say they are fully insured – and they probably believe it themselves – but the likelihood is they actually only have a public liability policy. This simply covers them in the event that they cause damage or injury to a third party following a negligent act, which of course you would have to prove. Being a liability insurance, it doesn’t cover issues like storm damage, arson, theft of materials or plant, to name just a few — essentially all the uncontrollable things you really do need to protect yourself against.

One huge potential pitfall is if you are carrying out work close to your neighbour’s foundations. If work on your project damages a neighbour’s property, this won’t be covered by public liability insurance. You need to make special arrangements with your site insurance provider to get adequate protection in place.

3. Can’t I just get a policy later on in the project?

This is a short-sighted approach that could end up costing you more money. Even if there are only a few months left on your project, the insurer will charge you a premium that is based on the reinstatement cost from the point the work started. The best practice is to get insured as soon as you buy a plot or start any form of renovation works.

4. Isn’t equipment insured by the company I’m
hiring from, anyway?

The person signing the hire contract, i.e. you, is invariably responsible for repairing damaged plant or replacing it if it’s lost or stolen while it is on loan. You are also responsible for the continuing hire charges until the item is replaced – even a small crane can cost hundreds of thousands of pounds. Plant, tools and equipment can all be included as part of your site insurance policy.

5. Will declaring a lower property value save me money?

Rather than the projected value of your finished build, you should take out a policy for the professional reinstatement cost — which is the value representative of a contractor clearing the site and rebuilding your project from scratch should anything go wrong, including all fees. If an insurer identifies that you have deliberately underinsured, then they will reduce the claim proportionately