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The Essential Guide » The Planning Stage » Self Build Insurance | Site | All Risks | Public Liability | Buildings
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Site Insurance / All Risks Insurance / Public Liability Insurance.
Introduction to Site Insurance:
Before you set out on any major Self Build, Renovation, Conversion or Extension project you need to make sure you have adequate and suitable insurance to cover both you and the project.
There are now many Site Insurance policies available to you, but before you choose one it’s handy to know what you need to cover.
We are becoming a more “litigious” society by the year, following America in many respects. It seems that these days if anyone can find a way to make a claim against someone else, they will. – A couple of years ago I was working on a house project in an area I was unfamiliar with, and which, shall we say was “Not the best area”.
The Building Inspector called one day and noticed that out on the footpath where we had excavated for the electrical connection, we had backfilled, but not completed the “making good” of the footpath. There was a barrier around what was just a small, 2” – 3” deep recess in the footpath, waiting for a bit of macadam to finish off the repair. The Inspector suggested strongly that I finish the work as soon as possible because “If word gets out that there is a hole in the pavement, the barrier will very quickly “mysteriously disappear” and you’ll have people “queuing up to trip over” so they can claim on your insurance!”
Something else to bear in mind is that if someone breaks into your site, and then hurts themselves whilst they are in there, they can STILL often claim against you, - on the basis that you had not taken sufficient steps to secure the site and make it safe. – If they succeed in their claim it can in some cases mean a prison sentence for you!
This might not seem fair, but it’s how it is, so you need to make sure you are properly covered before you start.
What should site Insurance cover?
The first thing to be aware of is that if you have standard “Buildings Insurance” on a property, it probably won’t cover you for any “development work” on it. You will usually need to take out a separate policy.
Good Site Insurance should cover you for as many “potential claims” as possible. Some of the areas it should include are: ( Note: this list is not exhaustive, but is intended to give you a guide as to some of the main considerations when you think about Site Insurance. Each project will have its own unique factors and you should take advice on your own project before taking out any Insurance policy).
Existing Property:
If your work damages or affects any neighbouring property in any way, there is the possibility that a claim could be made against you. This could be caused by excavation, machinery, vibration or any of dozens of other causes. Any neighbouring property owners will probably be keeping a keen eye open for anything that has a negative affect on their property.
(Hint: Before you start it is s good idea to take plenty of photos of existing properties, making sure that you pick up on any defects which are already apparent. These photos can then back you up in the event of a claim being made)
Injury to the public:
This not only includes anyone who is passing and gets hurt for whatever reason, but also covers anyone who breaks in. – It may seem unjust that you have to pay out to cover burglars and vandals, but that’s just how it is!
Injury to your workforce:
The Building Industry is notoriously dangerous sector of industry. Accidents are common. From stepping on a nail left in a plank of wood, to falling off or through scaffolding. – Larger Contractors and even Sub Contractors should have their own insurance policies in place ( and you should ask to see them), but in the event that either they don’t have a policy at all or that their cover is not adequate, you should make sure that YOU are covered against any claim they may make.
Injury to you or your family:
You need to make sure that you and your family are covered for any eventuality. This section of a policy may be separate from the “public liability” section, so you need to make sure that you check to make sure that if you or any member of your family were to have an accident, that you will be able to claim. – This clause can be important where there are children possibly living with you in a caravan on site, who may decide that despite strong warnings from you, the construction site makes a good playground!
“Damage or loss” to your property ( including reinstatement):
This could include damage caused by vandalism, theft, natural causes, accidents, faulty goods, faulty workmanship, terrorism etc. It will need to cover the actual cost of the “action” plus the cost of “putting it right”. So, for example if you have installed a kitchen and thieves break in, rip it all out and cause damage to the structure of the building in doing so, you need to be covered for not only replacing the kitchen units and appliances, but also for reinstating the structure to its previous condition.,
Plant / Site Accomodation:
During the construction period, you will normally have a lot of “plant” of differing types “coming and going” for use on the project. Ranging from large mechanical excavators to small generators and hand tools. Theft of the smaller items is common place, and although theft of the larger items is fairly rare, vandalism and other damage happen regularly. One fairly common type of claim for “plant” is made where tools, generators etc are kept in a lockup or a building over night. If the lockup is not “substantial” in construction, thieves will take “no time” in getting in and helping themselves. – If your storage facility is deemed by the insurance company not to be suitably secure, then you may find that you are not covered for the cost of replacements. – In some cases you could find yourselves landed with a bill for thousands of pounds from sub Contractors and Contractors.
(Hint: Where possible, don’t allow your workforce to store anything valuable on site. Insist on them taking their plant with them, and make a note in any contracts drawn up that you are not responsible for any loss or damage to any of their plant which is left on site).
Site accommodation needs to be covered. Damage to cabins can occur as part of a plant theft, but there is also the possibility of “wilful” damage where vandals just “set light” to a timber site cabin, or damage it in some way “for a laugh”! Tipping over one of the plastic “Portable w/c’s” would take a couple of kids about 10 seconds to do but would cost you maybe a few hundred pounds to repair. (Note: You need to take steps to stop easy access to gas bottles and anything which could be used to help to cause such damage)
Professional / Legal fees:
These can include Solicitors, Architects, Planning Consultants, Surveyors, Specialists or anyone who may become involved, or have an increased involvement in a project due to an unforeseen event, whose involvement creates a cost against the project.
Lost Time:
Lost time on any project can lead to an increase in cost, sometimes substantially. – You need to make sure that a problem on site does not lead to cash flow problems which could jeopardise the continuation of the project.
Transport:
If you are using a van of some description for the project, you need to make sure that it is covered for the type of work you are using it for. – It may be adequately covered on your standard policy but you would be wise to check. – You may be using it to pick up the workforce, carry valuable items or store items in. – There are often “exemption clauses” in policies which would mean that you would not be covered for certain “eventualities”.
GENERAL:
Before taking out any policy, you would be sensible to take advice from specialists who deal with this type of project on a regular basis. They will know the pitfalls and should be able to highlight the areas where your project may be unique and where a policy might not necessarily cover you adequately. You may even need to take out more than one policy to be adequately covered.
“Exclusions” / “Excesses”:
Just as important as what IS included in a policy, is what IS NOT!
You may think that because you have taken out an “All risks” policy for your project, that you are covered for any eventuality. You are not.
If you read the either the breakdown of the policy before you take it out, or the policy documents once you have the policy you will find a section titled “Exclusions”. – The contents of this section will vary from policy to policy, but the exceptions are just as important as the inclusions to you as a policy holder. You may think that you are covered for leaving materials on site overnight, locked inside the building. But in fact you may find that they are only covered if they in a secure “lockup”. You may think that you are covered for damage of materials in transit to your site, but could find out that in fact they aren’t. – Its worth checking out the policy before you commit to it.
There is also the matter of the “excess” which most policies include. The excess is the amount that the policy holder is liable for in the event of each and every claim made on the policy. An average excess is around £500. If you make a claim which totals any less than your excess amount you won’t receive any funds from your policy provider. If you make a claim for an amount slightly more than the excess then you may get a little money from the claim, but you could find that you pay for it in future years if: a) You decide to do another project b) If you transfer your “Site Insurance” policy to a “Buildings and / or Contents” policy, which some of the products allow you to do. – Any claim made during the construction period could increase your premiums in the years to come.
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