Are you over insured?
As a contractor you’ll likely need several different kinds of insurance to protect yourself and your business against accidents or mistakes at the various sites that you are working on. But are you paying too much for your insurance?
In particular, when working on a construction site that’s managed by a larger organisation, they will often have covers in place that will also cover you and your work up to a certain amount.
Types of insurance you may need on a construction site
Employers’ Liability Insurance
Employers’ Liability Insurance is compulsory by law for most businesses, except sole traders like self-employed tradesmen. If you employ staff or sub-contractors you are responsible for their safety while they are at work. EL insurance provides protection up to a specified limit and the cost is based on things like the type of business you have, wage roll and the number of people you employ.
Public Liability and Products’ Liability
Public liability insurance covers compensation and legal fees if you are found to be responsible for injuries to third parties, or damage to their property. It covers you for accidents like damage to underground services, slipping on wet floors, or tripping over exposed wires or cables.
Products liability covers you for accidents and injuries caused by the products you supply.
Contractors All Risk
Contractors All Risks insurance is designed for contractors working on sites. It covers your materials, tools and equipment when you’re using them on that site.
Professional indemnity insurance protects you and your business against claims for injury, loss or damage caused by your negligence. Read more in our simple guide to professional indemnity insurance.
Goods in Transit
Goods in Transit insurance covers items against loss or damage while they are being transported in a vehicle from one place to another. This is unlikely to be covered by your motor insurance, so make sure you check if you have the appropriate cover in place.
Where might you be over insured?
Certain construction sites and projects will have their own insurances in place arranged by the employer or main contractor to cover the work that is being carried out. Depending on the contract conditions you are operating under, you may benefit from these. For example, large construction sites may have many different contractors and businesses working on site who will have their own cover. But the employer may also provide cover that protects against certain risks, meaning contractors may not require standalone protection. This may lead to premium savings when suitably adjusted rating information is provided to Insurers and at the same time avoid dual insurance cover.
However if you and the main contractor have cover for the same risks, you could be paying too much for your insurance. For example, if your turnover is £10m and £2m of this relates to work already insured by the employer’s policy, then you may only need insurance based on 80% of your turnover for certain sections of your cover.
How to check whether you have dual insurance
It is important to fully understand the work you are undertaking and the contract conditions you are operating under. If you think that you might be over insured, or doubling up your insurance check what cover the employer or main contractor for the site has. Then you can speak to your insurance provider or broker to alter your cover accordingly.