Construction Insurance
Construction insurance has to answer to two documents at once: the policy, and the building contract that was signed before the policy was arranged. One says what is insured. The other says what you promised — the limits, the joint names, the indemnities and, increasingly, the design responsibility. When those two disagree, it is discovered during a claim, and the gap belongs to the contractor. This page sets out what a construction programme has to get right, where the wording and the contract usually part company, and what to send us before the next tender goes out.
The Short Answer
There is no single product called construction insurance. Construction industry insurance is a category rather than a policy, and insurance for construction companies is a programme assembled around what you build, who you build it for, and what your contracts have already committed you to.
The works themselves. Contract works cover for the thing being built, plus temporary buildings, materials on site, and materials in transit or stored off site — the last of which is a goods in transit question as much as a construction one, and is not automatic.
The kit that does the building. Owned plant, hired-in plant and the continuing hire charges that keep running after it is stolen, tools, and the site huts and containers they live in.
The people and the public. Employers’ liability for everyone you employ and for the labour-only subcontractors most firms do not think of as employees, and public liability for damage to the client’s property, the neighbouring property and anyone on or near the site. Construction liability insurance is where a modest contract turns into a large claim: a small job next to a valuable structure carries the value of the structure, not the value of the job.
And what you said you would do. Professional indemnity where you take design responsibility — on a design-and-build contract that often means the whole design, not just your own detailing — and products and completed-operations liability for the work after handover, which our products liability insurance page covers in its own right.
Where this page stops. A sole trader insuring a van, a toolbox and a single public liability limit is buying something simpler than this, and it is on our tradesman insurance page. Commercial construction insurance in the sense used here means a firm running contracts, carrying subcontractors and signing terms.
Contract Works, Plant, Existing Structures, Design
Contract works, plant, existing structures and design. Those four are what the home page promises this page will answer, and they are also, in that order, where construction programmes are usually found wanting.
Contract works generally addresses insured damage to the works. It is not a guarantee of workmanship, and it is not a guarantee that the job gets finished. Materials in transit, materials stored off site and anything already incorporated into the employer’s building may all sit outside it unless they were arranged in. Ask who owns the materials before incorporation, because that answer decides whose policy is looking at them.
Hired-in plant is where the money goes missing. The hire agreement usually makes you responsible for the item and for the continuing hire charges that keep accruing after it is stolen or written off, and the two are separate heads of loss. Add your own plant, small tools, site huts and containers, and the schedule needs values that are current rather than inherited from a previous renewal.
Existing structures are the exposure that turns a refurbishment into a serious claim. The employer’s property, the part of the building you are not working on and the structure next door are not your works, and damaging them is a different question from damaging what you are building. Who insures the existing building during the works is a contract question first and an insurance question second.
Design responsibility arrives by contract, not by choice. A design-and-build appointment, a contractor’s design portion or a specification you proposed all bring professional indemnity into the programme, and a subcontractor’s cover does not answer for your obligation. How that cover behaves over time is on our professional indemnity insurance page, and it is worth reading before the next tender.
One more, underneath all four: a subcontractor’s policy should not be assumed to fulfil a main contractor’s contractual obligations. Collecting certificates is not the same as checking that what the certificates cover is what your contract requires of you — and the certificate that matters is rarely the one that was easiest to obtain.
The Legal Position
There is no universal law requiring a contractor to buy “all risks” cover for the works. What is compulsory is narrower and older: employers’ liability for anyone you employ, and road-use duties for anything driven on a road. Everything else in a construction programme is compelled by contract — and building contracts are specific in a way that statute is not. They name the cover, the limit, the parties to be insured and the period it has to run for. Failing to meet those terms can mean exclusion from a project, a breach-of-contract claim, or carrying a loss the contract had allocated to you. None of that is a regulatory matter, and all of it is enforceable.
CDM 2015 allocates duties, and being the principal contractor is a legal role. In Great Britain the Construction (Design and Management) Regulations 2015 place duties on clients, designers, principal designers, principal contractors and contractors, and they are about managing health and safety through the whole project. Appointment as principal contractor is a legal position, not a line on an insurance schedule — and workplace, work-at-height, asbestos and equipment duties can all apply on top, depending on what the job involves. No policy discharges a CDM duty.
Long-tail liability got considerably longer in 2022. The Building Safety Act 2022 raised building-safety and redress issues that reach back a long way. For relevant claims under section 1 of the Defective Premises Act 1972, official guidance explains a 30-year retrospective period and a 15-year prospective period tied to the June 2022 changes. Those are not universal limitation periods for every construction claim, and nobody should present them that way — but the insurance implication is real: historic work, professional indemnity continuity, exclusions and run-off deserve examining rather than assuming that exposure ends after six years.
A safety prosecution is not a claim. Enforcement arises from the underlying breach, not from the absence of a construction package, and no policy pays a fine or the cost of putting a site right. What insurance answers is the civil consequence and the contractual one — which is why the document to send a broker is the contract, not just last year’s schedule.
The Gap That Shows Up in a Claim
Each of the four below is a place where the contract promises something the policy was never written to deliver. None of them is visible at renewal, and all of them are visible the week a claim is notified.
A wording may cover the cost of correcting defective work, the damage that defect caused to everything else, or neither — and the three are genuinely different grants. Establish which one you have before a client asks you to put something right. “All risks” has never meant every risk, and the difference between redoing a failed element and repairing what it wrecked can be most of the claim.
A joint-names works policy and two separate policies are not interchangeable. Joint names changes who can be pursued after a loss and how the claim is handled, which is precisely why contracts ask for it. Agreeing to it in a contract and then presenting your own single-name policy is one of the commonest ways a contractor discovers a problem at the worst possible moment, with the site already stopped.
Professional indemnity generally answers negligence. A contract promising that a building will be fit for its purpose promises something stricter, and a promise that exceeds the policy is uninsured by definition. The same trap sits in collateral warranties, which are signed late, read quickly, and outlive the job by years. Read the wording before signing it, not when a client relies on it.
A contractual indemnity can extend well beyond an ordinary public liability grant — taking on liability that would not otherwise have been yours, sometimes without any negligence at all. Construction liability insurance responds to the policy wording, not to the clause you signed, and the two need comparing before the tender is returned rather than after. Ask which clause you actually signed.
The practical version of all four: send the contract, not just the schedule. Reviewing design obligations and collateral warranties before promising compliance with a client’s insurance clauses is the single cheapest thing a contractor can do, and it takes an afternoon rather than a claim.
Before Quoting
Construction business insurance is rated on what you actually do, not on the word “construction”. A groundworker, a shopfitter and a design-and-build main contractor are three different risks at the same turnover, and construction contractor insurance is priced off that difference rather than off the label. Four groups of answers separate them.
Not the total — the split. New build, refurbishment, groundworks, roofing, demolition, structural alteration, shopfitting and maintenance all rate differently, and the percentages matter more than the headline figure. Add the design fees separately if you take design responsibility, because that is a different premium base from contracting turnover.
Maximum contract value and duration, the largest job you have ever run, site locations and what stands next to them. Then the specifics underwriters ask about by name: depth and height, demolition, underpinning, piling, asbestos, cladding and fire safety, combustible construction, underground services, work near railways or airports, and hot works.
Payroll split between your own employees, labour-only subcontractors and bona-fide subcontractors, because the three are treated differently and the middle one is routinely misclassified. What you require of subcontractors by way of cover, whether anyone checks the certificates against what your own contract demands, and who does that checking.
Owned and hired plant values, tool values and where they are kept overnight, your method statements for the work an underwriter is nervous about, and the claims history behind all of it. If professional indemnity or latent exposure is in play, details of work completed in previous years belong in the submission too, along with the method statements behind them.
The contract is the document most often missing from a construction submission. A schedule tells an insurer what you bought last year. The insurance clauses in your current contracts say what you have since agreed to carry — the limits, the joint names, the indemnity wording and the period — and those are the terms that decide whether the programme actually works. Send both, and send them before the tender if the job is a departure from the ordinary.
Who You Would Deal With
The questions that decide a construction programme are about contracts and activities rather than premiums, and they are best asked by someone who will still be there when the job completes.
Ian Cooke has thirty-four years in the industry, leads the internal team and owns compliance. On this class he is the person who will ask for the contract rather than the schedule, and who will want the turnover split by activity before anyone talks about price. Donna Hall brings over thirty years and leads new client work. Kate Thompson works with Donna on new clients and onboarding, which on a construction account means getting the activities, the subcontractor arrangements and the contract clauses documented properly at the start rather than at the first claim.
Colin Thompson is our Claims Manager, with over eighteen years in the role. A construction loss is rarely one claim: the works, the existing building, the client’s own losses and a professional indemnity notification can all be running at once, across more than one insurer, while the site stands still. Claims are handled in house, by someone who already knows the contract, and the rest of the team is on our team page.
Construction Insurance Enquiry
Park is an independent construction insurance broker in Durham, arranging construction insurance UK-wide for contractors, builders and developers, from the North East outwards. Six questions and an optional upload. The two answers that decide the most are your turnover split by activity and whether you take design responsibility. Upload your schedule and the insurance clauses from a current contract if you have them — a construction insurance quote written from a schedule alone is a guess at what you have already agreed to carry. One working day, no fee, no obligation.
Common Questions
A programme rather than a policy. Contract works cover for what you are building, plant and tools including hired-in plant, employers’ and public liability, professional indemnity where you carry design responsibility, products and completed-operations liability after handover, and legal expenses. Latent defects, performance bonds, surety and delay covers are separate subjects and are not automatic extensions of anything. Which parts you need is decided by what you build and what your contracts require.
Not as a package. There is no universal law requiring a contractor to buy cover for the works. Employers’ liability and road-use duties apply in the ordinary way, and everything else is required by your contracts — which typically name the cover, the limit, the insured parties and how long it has to stay in place. Missing those terms is a contractual problem rather than a regulatory one, and it can still cost you the job.
No, and this is the most useful sentence on the page. Contract works generally addresses insured damage to the works. It is not a guarantee of workmanship and it is not a guarantee that the contract gets finished. Separately, a wording may cover the cost of correcting defective work, the damage that defect caused to other property, or neither — three different positions, and worth establishing which one you hold before you need it.
The contract decides, and the answer is not always the party you would expect. The employer’s existing structure is not your works, so damage to it is a liability question rather than a works one, and some contracts require the employer to insure it in joint names while others leave it with the contractor. It is worth settling in writing before work starts, because after a fire it becomes the most expensive argument on the job.
Two losses, not one. The hire agreement normally makes you responsible for the value of the item and for the hire charges that continue to run until it is replaced or the contract ends, and a policy that answers the first does not necessarily answer the second. Check the limits against the plant you actually hire in a busy month rather than against a figure set when the business was smaller.
Professional indemnity enters the programme, and your exposure stops being about what you did on site and starts being about what you specified. A design-and-build appointment often carries the whole design, not just your own detailing, and a subcontractor’s cover does not discharge your obligation. Watch for a contract that promises the work will be fit for its purpose: that is a stricter promise than negligence, and a promise that goes beyond the policy is uninsured.
No. CDM 2015 places duties on clients, designers, principal designers, principal contractors and contractors, and being appointed principal contractor is a legal role rather than an insurance classification. Insurance answers the civil and contractual consequences of things going wrong; it does not discharge a safety duty and it does not pay a fine. Prosecutions follow the underlying breach, not the absence of a policy.
Yes. Send the schedule, your turnover split by activity and the insurance clauses from a current contract, and we will tell you whether the limits and the insured parties match what you have agreed, whether existing structures and hired-in plant are properly arranged, whether design responsibility is covered as accepted rather than as assumed, and whether anything is being paid for twice. If it is correctly arranged we will say so, and there is no fee either way.
