Self Build Insurance & Warranties

Building a home is a complex process. The finished result is worth the effort, but 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.

STAGE 1

SCENARIO I’ve bought my plot

YOU NEED Public liability cover

Now that 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 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 planning permission will be granted quickly, a package will save yourself hassle further down the line.

STAGE 2

SCENARIO I’ve got planning & Building Regs consent

YOU NEED Site insurance & structural warranty

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

Site insurance is a comprehensive policy for self builders, covering:

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

When you take out site insurance, it’s important the sums insured figure is right. This is the maximum amount your insurer will pay out on a claim, and must be enough to cover the cost of completely replacing and reinstating your self build project should the worst happen. This includes all progress made on site to that point, along with equipment and materials. If you need to claim and the sums insured is too low, you may not have sufficient funds to finish the build. A good provider can advise on the right amount of cover.

Building a home is one of the biggest investments you can make, so it’s important to ensure you’re covered with the correct insurance and warranties. Photo: iStock.com/andreypopov

Structural warranties are insurance-backed policies that cover a self build home for any defects in the design, workmanship and materials for the first 10 years following completion. If you decide to sell your house in that period, you can transfer the warranty to the new owners. It’s important to note a buyer’s mortgage lender will almost always require a warranty as a condition of the loan.

To save money and hassle, it’s wise to take out your structural warranty before building work begins. Your provider will carry out technical audits during construction to ensure best practice is followed and minimise the risk of defects. The first audit is when you start excavating for foundations – hence the need to put the warranty in place before work commences.

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 also need to still be practicing for the period of the policy, plus you would have to prove they’d been negligent if you need to claim.

STAGE 3

SCENARIO I’ve finished my self build project

YOU NEED Standard home insurance policy

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 organise standard homeowner’s buildings and contents insurance.