Builders businesses can be very large organisations but it’s probably fair to say that for many people, the industry sector summons up images of small and fiercely independent businesses.
However, the fact that your building business might only have a few employees and be relatively modestly sized in turnover terms when compared to the big national chains, doesn’t remove the need for insurance protection. In fact, it makes it even more important.
Where you’re at risk
Let’s consider a number of things which might cause you huge expense unless you have builders insurance to assist:
- you’re sued by a client for damages caused as a result of work you’ve carried out or failed to carry out. Avoid assuming this couldn’t happen because the UK is becoming an increasingly litigious society;
- one of your employees is injured while working for you and sues you for compensation. In passing, sub-contractors or pals doing you a favour might be interpreted, under law, as being de-facto employees even if they lack an employment contract;
- damage to your buildings by fire or flood;
- the loss or theft of your tools, site equipment or office based items such as PCs.
This is a far from comprehensive list but it indicates that builders insurance isn’t just a “nice to have”. It might one day save you from financial ruin and keep in mind that covering your employees (employers’ liability insurance at a minimum level of £5million of cover) is, in the vast majority of cases, a legal requirement.
Public liability cover
It’s worth exploring this specific area in a little more detail.
This type of cover is typically included in builders insurance. It’s aimed at claims lodged against you that someone has suffered injury as a result of your activities or possibly damage to their property. A crude illustration might be if you drop something off a ladder and it strikes a passer-by, injuring them in the process.
A subtle distinction though arises in situations where you’re potentially being sued as a result of the quality of the work you’ve undertaken or under contract provisions for work you’ve not completed etc. They’re closely related and essentially involve a client or other party, saying you undertook to do something in return for a price but which you subsequently failed to deliver upon.
The law permits action to be taken against you for up to between 3-6 years (depending upon circumstances) after you’ve completed the work. There are also many legal professionals who are willing to help complainants sue if necessary.
Remember, whether you agree or not with the basis of the complaint isn’t a factor in deciding whether or not you can be sued! Your clients don’t need your permission to do so.
This type of issue is categorised under “professional negligence” and the costs can be substantial if the due legal processes find against you. When considering builders insurance, it might be prudent to consider cover for this eventuality to and take out specific cover to protect yourself.
Make sure that you’ve attended to the basic support structures of your business in order to protect you and your family going forward.
Find out more about builders insurance before it’s too late.