Property Developers Insurance
Property developers insurance is not one policy and it is rarely bought once. A developer is the client on a construction project, the owner of a half-built asset, and in time the owner of finished units nobody has bought yet — three different insurance positions, often running at the same time on the same site. The contract usually decides what has to be in place, the lender frequently decides the rest, and the contractor’s certificate rarely answers for either of them. This page sets out what a development programme has to cover, and the questions worth settling before the first spade goes in rather than after a loss.
Three Positions at Once
A developer is not a contractor, and the distinction decides the programme. A developer appointing a main contractor, a principal contractor coordinating others and a subcontractor supplying a package all carry different exposures. You may hold none of the tools and still own the works, the site and the finished building. Construction insurance covers the contractor’s side of a project; this page is about yours.
The works, while they are going up. Contract works cover addresses insured damage to the works themselves. It is not a guarantee of workmanship, and it is not a guarantee the job gets finished. Where you are converting or extending, the existing structure is a separate question and one of the most commonly unresolved on a development.
The liabilities, which outlast the build. Public liability for injury and for damage to what is next door — a modest contract can create liability to a far more valuable adjoining structure. Employers’ liability where you employ anyone directly. And professional indemnity wherever design responsibility sits with you rather than with a consultant.
Then the part developers reach last. Completed units that have not sold, or that you keep. The moment practical completion passes, a works exposure becomes a property owner exposure, often while the building is empty. Unoccupancy, security and the basis of cover all change at that point, and the policy that got you there was not written for it.
Where this page stops. This is the developer’s position. If you are the contractor doing the work, start with construction insurance. And nothing here replaces the duties the project puts on you — insurance responds to loss, it does not discharge a legal role.
Four Schemes, Four Answers
Four shapes of development, and the insurance question is different in each because what is at risk is different: an empty site, somebody else’s building, a long commercial programme, or an asset you now own and cannot sell.
A clear site, a main contractor and phased handover. The questions are the contract works sum, who owns materials before they are built in, and who insures a plot once it is finished while the next one is still a shell. Building site insurance bought as one annual product rarely matches a programme that changes shape every quarter.
The hardest of the four, and always the same question: who insures the existing building? Property renovation insurance rarely answers it. A conversion puts your contractor inside an asset that already has a value and an owner, and hot works, asbestos and structural alterations sit on a structure no contract works section covers.
Longer programmes, staged funding, and an end user whose own interests have to be reconciled with yours before completion. Lease terms, funder requirements and pre-lets routinely specify limits, insured parties and durations, and those requirements have a habit of arriving well after the cover was arranged rather than before it was.
Unsold plots, retained units and show homes. This is the exposure developers forget, because it begins at the moment the build is finished and the attention has moved to the next scheme. An empty finished building is a different risk from a construction site and from a let investment, and it is usually neither on the policy.
Most developers are running two or three of these at once, on different sites and at different stages. That is normal, and it is exactly why a programme arranged around one scheme tends to stop fitting about eight months in, usually at the point a second site starts.
The Contract, Not the Statute
No law requires you to buy a product called property developers insurance, and there is no universal requirement to hold contractors all risks either. Employers’ liability applies if you employ anyone and motor duties apply to vehicles on a road. What actually compels cover on a development is the contract, and often the funding agreement behind it.
Contract terms commonly require works, public liability and professional indemnity at specified limits, in specified names, for a specified duration. Missing any of the three is not a technicality: it can mean exclusion from a project, a breach-of-contract claim, or carrying a loss the contract had allocated somewhere else. The limit is the part people check and the insured parties and duration are the parts that fail.
CDM 2015 allocates duties across the project — to clients, designers, principal designers, principal contractors and contractors. On most developments the client is the developer, and appointment as principal contractor is a legal role rather than an insurance classification. Safety prosecutions arise from the underlying breach, not from the absence of an insurance package, and no policy discharges a CDM duty.
And the exposure does not end at completion. The Building Safety Act 2022 made significant changes to building safety and redress. 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 linked to the June 2022 changes. These are not universal limitation periods for every construction claim, but they are a reason to look at historic schemes, professional indemnity continuity and run-off rather than assuming exposure ends after six years.
What insurance does and does not do here. It responds to insured loss. It does not make a scheme compliant, it does not answer for workmanship, and a contractor’s certificate is not evidence that your own contractual obligations have been met. A subcontractor’s policy should never be assumed to satisfy the main contractor’s requirements, and a contractor’s should never be assumed to satisfy yours.
The practical consequence is that the contract and the insurance need reading together, by someone who has read both. That is most of what we do on a development account, and it is far cheaper before signature than after a loss.
Confirm, Do Not Assume
Four questions that decide whether a development programme actually responds. Each has a written answer, and each is quicker to settle now.
On a conversion or refurbishment, establish in writing who insures the existing structure — you, the contractor, the current owner, or nobody. Contract works addresses damage to the works; the building you are working inside, the employer’s property and materials stored off site may each need separate cover. It is the commonest gap on a development.
Establish whether the policy pays to correct defective work, pays for damage the defect causes, or neither. Wordings distinguish all three and the difference is enormous. A policy that excludes the defective part but responds to the resulting damage is normal; a policy that does neither is also sold, and it is rarely obvious which one you have bought.
Joint names or separate policies is not an administrative choice. It changes who can be pursued after a claim, because an insurer paying under a joint-names policy is in a different position on recovery from one paying under two. Confirm every party the contract requires to be named, and check they are on the schedule, not merely in correspondence.
Confirm what happens at practical completion, in advance. When does the works cover end, what covers an unsold or retained unit from that moment, and does the insurer accept the unoccupancy that follows? A finished building standing empty through a slow sales period is the point at which developments most often discover they are uninsured.
Four written answers. Most of the development programmes we review can produce one or two, almost always the limit and almost never the insured parties. If yours answers all four it is properly arranged and we will say so.
The Fact-Find
A development cannot be rated from a turnover figure. Property development insurance is priced on the scheme, the site and the structure behind both.
What you are building, the contract value and the programme; whether it is new build, conversion or refurbishment; the procurement route and who carries design responsibility; and the insurance clauses in the building contract and in any funding agreement behind it. Send us the contract itself, not a summary of it.
The site and what adjoins it: party walls, neighbouring structures, basements and underpinning, piling, demolition, hot works, asbestos, combustible materials and cladding, underground services, and proximity to railways or watercourses. Development site insurance is rated on the neighbours as much as on the plot.
The ownership chart. Special purpose vehicles, joint ventures, parent companies and the entity that actually holds the land. A policy in the parent’s name is not proof that every SPV and beneficial interest is covered, and funders routinely require a named interest that nobody has got round to telling the insurer about.
Contract value by scheme, the programme and its phasing, how long units are expected to stand complete and unsold, security arrangements for the site and for finished buildings, design fees where design responsibility sits with you, and claims history including anything arising on previous schemes, however it was settled.
The change that matters most and gets reported least is a variation to the scheme. A basement is added, the programme slips two quarters, a phase is sold to a funder, the contractor is replaced, or the last six units sit finished through a slow winter. Each of those changes the risk and none of them feels like an insurance event — which is why a development account needs a call when something changes rather than a conversation once a year. The annual renewal is the worst possible moment to find out.
Named People, Not a Call Centre
A development account is a contract conversation before it is an insurance one, so you want the same people on it from tender to practical completion. These are the people you deal with, directly rather than through an account team.
David Park is our Managing Director and leads the business. A development account tends to start at that level because the questions are contractual before they are technical — what the building contract requires, what the funder requires, and whether the two agree. Donna Hall brings over thirty years and leads new client work, and Paula Hunter looks after a full range of commercial clients and works closely with the team on renewals, which on a development is where the scheme that was quoted and the scheme being built get reconciled.
Colin Thompson is our Claims Manager, with over eighteen years in the role. A development claim is rarely simple: damage to the works, to an existing structure and to something next door can arrive as one event with three policies and several insured parties looking at each other. Claims are handled in house, and the rest of the team is on our team page.
Property Developers Insurance Enquiry
Park is an independent commercial insurance broker in Durham, arranging cover for property developers across the North East and UK-wide. Six questions and an optional upload. The most useful thing you can send is the building contract and any funding agreement, because between them they usually decide what has to be in place, in whose names and for how long. Insurance for property developers written without reading those is written on an assumption. One working day, no fee and no obligation either way.
Common Questions
A programme rather than a product: contract works for damage to the works, cover for the existing structure where you are converting or extending, public liability for injury and for damage to adjoining property, employers’ liability where you employ anyone, professional indemnity where design responsibility sits with you, and property owners cover for completed units you hold or cannot yet sell. Which of those you need, and in whose names, is usually decided by the building contract and the funding agreement.
Not as a product, and there is no universal law requiring contractors all risks either. Employers’ liability is compulsory if you employ anyone and motor duties apply to vehicles used on a road. What compels the rest is contractual: building contracts and funding agreements commonly require works, public liability and professional indemnity at specified limits, in specified names and for a specified duration. Failing those requirements can mean exclusion from a project or a breach-of-contract claim.
Because their policy was bought for their exposure, not yours. A subcontractor’s policy should not be assumed to fulfil the main contractor’s obligations, and a contractor’s should not be assumed to fulfil the developer’s. You may own the works, the site, the existing building and the finished units, and you may carry duties as the client on the project. A certificate confirming someone else holds a limit tells you very little about whether your own interest is insured.
It has to be established and recorded, because it is genuinely open. It could be you, the contractor, the current owner, or in practice nobody. Contract works cover addresses damage to the works themselves; the structure you are working inside, the employer’s property and materials held off site may all need separate arrangement. This is the commonest gap we find on development accounts and it is usually discovered after a fire rather than before one.
Read the wording, because it may cover the cost of correcting the defective work, the damage that defect causes to the rest of the project, or neither. All three versions exist. A policy that excludes the defective element but responds to the resulting damage is common and reasonable; one that does neither is also sold. It is not usually apparent from a schedule, which is why it belongs on the list of things to confirm in writing.
The exposure changes and the cover usually needs to as well. Works cover is written for a site under construction, not for a finished building standing empty through a slow sales period. Unoccupancy conditions, security requirements and the basis of settlement all differ. Agree in advance when the works policy ends and what picks the units up, rather than finding the gap at the point you need to claim on it.
Longer than most developers expect. The Building Safety Act 2022 made significant changes to building safety and redress, and 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 linked to the June 2022 changes. Those are not universal limitation periods for every construction claim, but they are a reason to look at historic schemes, professional indemnity continuity and run-off.
Yes. Send the building contract, the funding agreement and your current schedule, and we will tell you whether the limits, the insured parties and the durations actually match what you have signed, who is on the hook for the existing structure, what happens to completed units, and whether anything is being paid for twice. If it is correctly arranged we will say so, and there is no fee either way.
