Being a contractor in the building sector carries with it certain responsibilities and legal obligations as well as carrying certain risks too. Here we look at those responsibilities and how to allay the risk.
You must be covered as a contractor for many different scenarios including the following, Professional Indemnity Insurance, Office Insurance, Personal Injury Insurance, Personal belongings and theft, amongst others so it’s absolutely necessary that you choose a broker who specialises in Contractor Insurance as it’s a specialist marketplace. Risk One is you choose the wrong broker to start with.
Top Claims for Contractors
The top claim is for personal injury and it can also be the most expensive if you are not covered properly. You can even risk manslaughter charges if you are not providing the correct level of cover for your employees in the personal accident insurance sector and the worst-case comes to pass. It’s not just your employees you have to cover but also passers-by, believe it or not, need to be covered on your personal injury insurance.
The next type of claim is for damage to existing property or utilities. You are liable if you do not have general accident cover for things like fire and fire damage, water leaks and water damage, accidental cutting or drilling into electrical cables, the cutting of water mains or the damage to a drain. Some of these have been known to run into hundreds of thousands of pounds in claims and unbelievably some were not insured. Is it worth the risk to your business not to be covered by specialist contractor insurance? If you are working with sub-contractors always work with someone you know and ask to see their insurance too.
You should also consider the risk posed if you were hacked and had the client’s details stolen. Cyber insurance can help you here.
You should also look at a constructor’s insurance policy that will pay you for loss of earnings, not just repair and renew any damage caused. Often the loss of earnings and/or delay to a job can cost lots more than the damage itself caused. A reputable contractor insurance specialist will be able to advise you with this.
To avoid the risk of a non-pay out you must document everything that happens with your specific claim, this will include photographic evidence, logs of which staff were there and times, witness details, estimates to repair the damage and any medical reports. This will all be required by the insurance company to start processing your claim.
Your construction claim cost should include the following,
- Any demolition of damaged buildings or structures
- All labour costs
- Sub-Contractors claims
- Damage to machinery
- Any management costs
- Cleaning up costs
- Protection of remaining building if needed.
As a contractor you must remember to claim all of your costs after an accident, you will have so many inconsequential amounts of time and money that you need to ensure you claim back for otherwise, you will lose money.
The level of Insurance needed depends on several measures listed below:
- The number of employees you have
- The level of Contractor insurance you have
- The annual turnover of the contractor’s company.
Professional Indemnity insurance is also required for contractors and you can build it into the package if contractor’s insurance if you ask your broker to do it.
You can also get specialist trades insurance, these are listed below,
- Scaffolders Liability Insurance Policy
- Plumbers Insurance Policy
- Plant Hire Insurance Policy
- IT Professionals Insurance Policy
- Developer Insurance Policy
- Welding Insurance Policy
- Renovation Insurance Policy
- Home Builder Insurance Policy
- Security Insurance Policy
Remember to always check your sub-contractor’s insurance policies and that they cover your responsibilities as the main contractor. Always take the advice of a professional and ensure that you are covered for every eventuality.
We hope this article regarding common risks for Contractors has answered some of your questions around the contractor insurance minefield. Thanks for reading.
