We focus on contractors below, but if you are looking to fully project manage or only engaging a few trades to undertake a simple internal refurbishment or remodelling, much of the below applies as well to the individual trades.

In the midst of the excitement of developing renovation designs, lining up all the works and the like, it’s easy to forget about key practicalities. Insurance is one of them.

There are risks associated with building works. Lots of them. 

You need to do some digging into what insurance your potential contractor has and consider what insurance you may need for your renovation project.

There are various types of insurance general contractors might get. Three of them are of the greatest interest to you as a potential client. 

The following are also ones to look out for but usually less critical than the above three.

As part of your vetting process, you need to ask the contractor what insurance they have and you need to verify that they have it. The same should apply to any bona fide sub-contractor they plan to use (i.e. plumber, electrician, roofer, etc), who should have their own insurance.

What’ll often happen is that a potential client either won’t ask at all or will ask if the contractor has insurance and the contractor will just say yes. That’s not enough. You need to dig deeper like a ravenous dog who knows there’s a bone buried somewhere in the back garden. Don’t stop until that garden is ruined and you have a bone in your mouth. Proceeding with construction works without being certain that the proper insurance is in place and providing adequate cover is like trying to get to Thailand by sea on a small dolphin shaped inflatable. You might make it and the end destination will mostly be glorious but there are tremendous risks, not least that you could come across a randy real dolphin that develops a thing for your inflatable and you drown while they get it on. 

Admin like this often isn’t necessarily a residential contractor’s strongest suit or maybe they’ve outsourced it or delegated it and the person handling it hasn’t done what they should’ve done. 

We’ve seen instances where:

These are just the benign “oops” scenarios. You also might encounter contractors who don’t have insurance for one reason or another and know it.

If the right insurance isn’t in place or doesn’t provide adequate cover, it can be extremely problematic for you. At the end of the day, the contractor is probably operating through a limited liability company. Although a catastrophe of whatever sort would also hurt them, they’re not particularly exposed personally and you realistically have limited recourse against the company which could just declare bankruptcy and wind-up its operations rather than pay out a lot of money to you. In other words, the chances are that you could easily be left to shoulder very significant costs and hassles to rectify things.

We’ve also come across instances where renovating property owners end up exposed to huge costs to have significant construction works fixed, including a collapsed roof and a collapsed drain under a permanent kitchen floor, and they couldn’t rely on contractor’s insurance for one reason or another. 

You might think that your own home and contents insurance might cover these eventualities but you’d be in for a surprise. Not the good kind like winning first in the local drawing competition you figured you’d enter because you had spare time on your hands but the bad kind like getting slapped by a drunken reprobate who accidentally dropped his kebab but mistakenly thought it was you who knocked it out of his hand. 

Your home and contents policy almost certainly requires that you notify your insurer in the event that you have building works done to your property (aside from simple day to day maintenance type work). The reason is that the insurer then suspends your policy or part of its coverage while works are carried out. For example, they’ll want to know things like if the works you’re having done are going to involve any part of the roof being removed, if the whole back of the house is going to be opened up aside from some thin wooden hoarding to keep out people and the elements or, if you’re leaving builders in charge of your house for three months while you go to Spain. You’ll quickly find that coverage for things like fire, floods and theft or unintentional damage to your property vanish before you get to say “hola”.  

This is one of those things that can’t be overstated — it’s extremely important that you find out and can verify what insurance they have and what it does and does not cover.

You should at least get the one-pager ‘confirmation of insurance’ type document from your potential contractor but really you want to see and review their actual policy schedule and any related policy wording or terms document.

Look out for:

As noted above, your home and contents (aka building and contents) policy almost certainly requires that you notify your insurer in the event that you have works done to your property. 

If it is suspended or if the insurer carves-out swathes of your coverage, be sure to immediately inform them when the works are done so that they can reinstate full coverage for you.

The reality is that, even if a contractor has insurance, there will be potential gaps in their coverage, and/or the coverage of bona fide sub-contractors. There could also easily be some issue with it that could result in a claim not being paid out or not being paid out in full. 

For example, it’s common for contract works insurance to exclude things like damage to the existing building (i.e. if you’re having an extension done, all the rest of your property is not covered), works being done above or below certain specified height or depth limitations and application of heat (e.g. using a blowtorch or grinder — and there’s a good chance some of the works will indeed involve application of heat). You also wouldn’t be covered if a big dispute emerges and one of the builders takes out their frustration in your property, wrecking the work done and battering various parts of the rest of your property with a hammer they found lying around. 

It’s therefore well worth considering whether or not to take out your own renovation works insurance, which is available from many insurance brokers these days.

What is covered by renovation insurance can vary from insurer to insurer. Some things that can be covered though and that you should look out for are: 

Watch out for some brokers offering renovation insurance that only covers a few not so relevant things or that are already covered either by the contractor’s insurance or by whatever is still in force under your home and contents insurance. They exist, and you’d be wasting your money going for one of those policies.

Ultimately, whether or not to get any renovation insurance and the extent of coverage will come down to yet another cost versus benefit decision. 

For example, if your project only involves construction work valued at, say, £30,000, the contractor you’re using is a big one and verifiably has its own insurance, and obtaining renovation insurance is going to cost a lot of money, then maybe you decide it’s not worth it. The bigger the contractor, the more likely they’ll have cash flow and resources to cover bigger costs like £15,000 worth of construction having to be redone. If they have adequate insurance, the more likely that most issues that can arise will be covered. 

If the work being done is costing a lot more though, there are potentially any significant gaps in the contractor’s insurance or their coverage level is potentially not high enough, and the renovation insurance you can take out doesn’t blow the budget, then probably you should go for the belts and braces approach of also getting your own renovation insurance. 

Honestly, this isn’t something we’d have considered initially, but knowing what we know now, we’d almost certainly pay to plug the gaps, whether real and actual or only potential.  

If you’re storing any personal property away from your home, you’ll need insurance covering your property that’s in the storage facility. 

It’s usually best not to buy this from the storage facility but instead have a look online elsewhere for much cheaper options. You can often get storage insurance at the same time as any required renovation works insurance and it might prove cheaper getting both together than obtaining them separately.