Self Build Insurance – What Insurance You Need & When

Building a home is a complex process. While the finished result is worth it, you’re sure to face challenges along the way – so it’s important to protect your investment. Self build insurance is
a must-have, but how do you know which policy you need and when? Here’s a step-by-step guide to help you select the right cover.

STEP 1: I’ve bought my self build plot

YOU NEED: Public liability insurance

Now you own the land, you can start designing your dream home. But first, you should take out public liability insurance. This protects you from claims or the costs of legal action if anyone who enters your site (or walks through your plot) has an accident – whether they were meant to be there or not. Even if you are not directly liable, you may still have to defend a case, which can be very expensive and the last thing you need when embarking on a major project.

You can obtain public liability as a standalone or part of a package – eg combined with landowner’s liability and contractor’s insurance. If you’re confident that planning permission will be granted quickly, a package is often best as you’ll save yourself hassle further down the line.

STEP 2: I’ve got planning & Building Regs consent

YOU NEED: Self build site insurance

Now your project has the green light, you’ll soon be starting on construction. Before you do, you’ll need to upgrade to full self build site insurance, as well as purchase your structural warranty.

Site insurance can offer comprehensive cover for multiple aspects of your project, including:

• Public and employer’s liability.
• Building works and materials.
• Plant, tools and equipment.
• Site huts and temporary structures.
• Any existing structures.
• Personal accident cover.
• Legal expenses.

With site insurance, it’s important to ensure the sums insured figure is right. This is the maximum your insurer will pay out in the event of a claim. It must be enough to cover the cost of completely replacing and reinstating your project should the worst happen – including progress made on site to that point, equipment and materials. If the sums insured is too low, you could find yourself with insufficient funds to finish your build. A good provider can advise on the right amount of cover.

YOU NEED: 10-year structural warranty

A structural warranty is an insurance-backed policy that covers your new build home for any defects in design, workmanship and materials for the first 10 years after completion. If you decide to sell the house in that period, you can transfer the warranty to the new owners, and the buyer’s mortgage lender will almost always require one as a condition of the loan.

To save money and hassle, take out a structural warranty before you begin building works. Your warranty provider will carry out technical audits during construction to ensure best practice is followed and to minimise the risk of defects.

The first audit is when you start excavating for foundations – hence why you need the warranty in place before works commence. If you delay until after some or all of the project is completed, the provider will have no way of knowing how well the building process was carried out. While retrospective warranties are available, they’ll cost you a lot more.

If you’re considering relying on an architect’s certificate instead, bear in mind these are valid for six years (not 10) and only cover defects in design (not materials or workmanship).
The architect would need to still be practicing for the period of the policy and you would also have to prove they’d been negligent to claim.

STAGE 3: I’ve finished my new build project

YOU NEED: Standard home insurance

Well done, it’s time to enjoy your new home! The structural warranty you arranged will now take effect and run for the next 10 years. You’ll also need to take out standard homeowner’s buildings and contents insurance.

Self-Build Zone offers a comprehensive range of self build, renovation, extension and site insurance cover. All of its insurance policies include public liability and employers’ liability cover as standard. More from Self-Build Zone >