The construction industry, including allied trades, is vast and complex, and although the majority of firms employ less than five people two main areas of protection are essential. These are Contract Works and Liability insurance. For larger firms particularly Liability is becoming increasingly onerous especially with regard to all aspects of Health & Safety, and the terms under which the building contract conditions have been agreed. The most common contracts currently in use are issued by the Joint Contracts Tribunal (JCT), the Institute of Civil Engineers (ICE) and the Department of the Environment (GC/Works), and it is always advisable to ensure that your insurance complies with all of these contract conditions.

Contract Works

Contract Works or Contractors All Risks insurance covers the tools and materials on site as well as the property in the course of construction or alteration. Any existing structures are normally automatically excluded as they are often already insured by the Property Owner. Cover can sometimes be extended as necessary if this is not the case. Insurance cover can also be extended to include Hired plant, Temporary Buildings, Show Houses, Materials in Transit and Terrorism.

Employers Liability

Since 1969 the Employers Liability (Compulsory Insurance) Act has required every employer carrying on a business, trade or profession to take out and maintain insurance against liability for bodily injury or disease sustained by their employees, arising out of, and in the course of their employment. The minimum requirement by law is £2 million. In practice, however, insurers do not issue policies in the UK for less than £10 million.

Public/Products Liability

The purpose of Public/Products Liability is to indemnify the policyholder under their legal liability, should they or their products cause death, bodily injury and/or loss of or damage to material property of a Third Party or Parties. Cover can be arranged for goods and services sold in the UK and/or on a Worldwide basis. This cover can be the most important section for any builder as often the "buck stops here" and not having the right cover could cause financial ruin with the sheer numbers of potential claimants or the extreme awards now being made by the Courts.

Engineering

Plant and Machinery such as Builders Hoists or Mobile Cranes and other similar equipment have a statutory requirement for the plant to be inspected. Insurance cover for the equipment, the damage that is caused on failure and the statutory inspection is available under a single policy.

Latent Defects

Owners or Developers can insure against damage to their property by Latent Defects*. Cover is normally available for up to 12-years following completion. It is best arranged before the construction programme has started in order to secure the best terms from insurers. Most people are familiar with NHBC Guarantees which are given on new domestic properties. Similar cover is also available for most New Commercial Properties, and this can provide up to a 12-years guarantee for the Owner/Developer. If any building damage occurs as a result of latent defects, the Insurer would cover the costs to rectify the problem.


* Latent Defects, are defects which have originally occurred at the time of construction but do not manifest themselves until some substantial time afterwards.

Construction Bonds

There are a number of different Construction and Performance bonds. Such bonds are normally mandatory in this sector, and they guarantee that all the various clauses within a specific contract will be executed. Should the contractor fail to perform their contractual obligations protection, a form of a financial a guarantee is provided.

Business Interruption

A Fire, Flood or other such disasters can cause financial ruin for any business. Insurers will pay for the repairs to the property or replacement equipment, but following a disaster, the project could be set back for months and reliance on the sale or rental income could be vital. This can be protected with the inclusion of Advance Profit/Advanced Rent cover.

Directors & Officers Insurance

The Companies Act 1985 alone sets out more than 200 offences for which a director can be personally liable. Add to this the numerous other offences under Health & Safety, Environmental and Financial Services Acts and it can be seen how important it is to consider this type of Insurance cover. The Insurance cover protects the personal assets of company directors and officials.

Legal Expenses

Commercial Legal Expenses Protection is becoming increasingly important to small and medium size businesses. This policy provides access to expert advice and assistance in resolving a number of different areas and if necessary will pay for the cost of legal fees and/or accountancy fees to conclude the dispute. Typical areas of cover, which often can be bought as a package include, Contract, Employment, Data Protection, Criminal Prosecution Defence, Property Protection and VAT Disputes. For larger companies wide cover is available for each specific area.


Cover can also be obtained for "After the Event" Litigation. A range of solutions is available for those who wish to pursue their legal rights through litigation.

Employee Benefits

Every company should give careful consideration to their employees' Conditions of Service. Click here for details of the various types of Employee Benefits available.