Property Development is a serious business, involving big investment and multiple risks. When managing a development, it’s vital that you are fully covered by a watertight insurance programme.
The pitfalls of insuring building projects and how to avoid them
When managing a renovation or building project there are many moving parts. One of the things a developer can do to protect their business is to have a watertight insurance programme. On a large project it can be difficult to know who is responsible for what, and at what stage responsibility transfers from developer to contractor, and vice versa.
To avoid the pitfalls of insuring a building project it is highly advised that you engage a specialist broker. Experienced, professional insurance brokers like Eggar Forrester will work out exactly what your needs are and then put together suitable insurance cover from a reputable and financially secure insurer.
What insurance do you need as a developer?
Rather than buying a single, one-size-fits-all policy, developers normally require a collection of different covers tailored to their specific needs. You may work on small, residential developments in rural areas, or large-scale commercial urban projects. Whatever your situation, we can make an assessment and find you an insurance solution that’s right for your business.
The insurance programmes we arrange for our developers are bespoke and flexible which means we can add and remove covers according to your requirements. However, a typical Property Developer’s insurance programme would usually include the following covers:
Contract works cover.
This insurance will provide cover against physical damage to the works being carried out. Cover is provided up to the full contract value and will protect you from damage caused by perils such as fire, flood, storm, vandalism or theft. The policy can be extended to cover any existing structure up to the full rebuild value, as well as your materials, tools and any temporary buildings erected during the project.
Unoccupied Property Cover.
Your development project may stand empty for some time after completion (or indeed prior to works beginning). Due to the substantially increased risks, many insurers are reluctant to provide cover at all and often heavily restrict the insurance. Eggar Forrester will make sure you remain insured on reasonable terms.
JCT 6.5.1 or Non-negligent liability insurance
This cover is particularly important when construction is being carried out in a built-up area where excavation or basement works are taking place. A public liability insurance policy will only indemnify the insured party against damage to third party property or persons which has resulted from their negligence. So, if the works damage a neighbouring property and the contractor has not been negligent, this cover becomes important as the property owner will be liable. Cover is normally arranged in joint names of the contractor and the employer and will protect the latter for ‘non-negligent’ damage to adjacent property during works.
Property Owners Liability Insurance.
This is a vital cover for anyone working in the development trade. It provides financial protection in the event you’re found liable for third party bodily injury or property damage on your property.
Employers Liability Insurance.
A legal requirement for any property developer with employees, this covers you against claims made by your own employees following injury suffered in the course of work – whether they’re full-time, part-time or casual.
Eggar Forrester JCT and Insurance advice for Developers and Private Clients
The insurance section of the JCT contract will set out which party is responsible for insuring the different aspects of the project. We at Eggar Forrester strongly recommend that our developer and private clients take responsibility for insuring both the existing structure and the works for the duration of any building projects for the following key reasons:
- Rather than relying on a contractor to do a comprehensive job of arranging insurance, this allows you to be in control,
- If you only insure the existing structure yourself and rely on the contractor to insure the works, insurers will heavily restrict cover, probably only providing FLEA. This means you’re not insured for certain perils and are probably also breaking the terms of your mortgage.
- You will have ‘All Risks’ cover for the existing structure and the works.
- One insurer for all elements will mean a much cleaner claims process.
- We also strongly advise that you ensure your contractor holds Public Liability Insurance to a suitable level.
Our friendly expert brokers are only an email or a phone call away. Don’t put your project, your people or your business at risk, get in touch today.
From one-off builds, through conversions, extensions and rebuilds to a simple new home, grand designs or major building projects Eggar Forrester can help you find the best value insurance cover.