Builders' public liability insurance

What is public liability insurance for builders?

Construction is a hazardous industry, so you’ll want to protect yourself and the public if something goes wrong. If someone makes a claim against you, public liability insurance offers you protection that could cover your legal costs and any compensation you might need to pay.

Public liability insurance isn’t a legal requirement for businesses in the UK. But if you don't have it and someone makes a claim against you, the impact on you and your business could be hugely damaging.

Accidents can happen, even if you have strict health and safety procedures in place. Public liability insurance can help protect your business from more than just financial costs – it can be vital for securing new contracts.

  • Public liability insurance can be an essential requirement for potential customers – some won’t consider using you for building work without it. Local authorities usually ask for a minimum cover level of £5 million before you can tender for work.
  • Subcontractors without public liability insurance could lose out on valuable contracts from contractors who consider it an essential requirement and won’t work with you unless you have it.

What will public liability insurance cover?

If you’re responsible for causing personal injury to clients or members of the public, or for damaging their property, public liability insurance could cover any resulting legal costs, medical expenses or compensation, as well as the cost of any repairs.

As a builder, you’ll often be working in close proximity with the public, on public and private property, so it’s not just you and your employees who are at risk if accidents happen.

Here are just a few examples of when public liability insurance could be invaluable:

  • the scaffolding you’re working on falls down and injures a passer-by, and they decide to claim compensation
  • you’re demolishing a wall and some of the brickwork falls onto and crushes a nearby parked car
  • your work weakens the structure of a building and, as a result, a ceiling or wall collapses and causes injury

What will builders’ public liability insurance not cover?

This type of cover is specifically for damage or injury to the public or to their property, so you can’t claim for any accidents or injuries that you or your employees suffer. And if you do have employees, remember that it’s a legal requirement to have Employers’ liability insurance – the fines can be extremely high if you don’t.

Similarly, builders’ public liability insurance won’t cover you for any damage to your own property or business premises, or to your own tools and equipment – you’ll need extra cover for that.

Public liability insurance cover can vary, so you should always check the policy terms carefully to see what you’re covered for and what’s excluded.
Public liability insurance cover can vary, so you should always check the policy terms carefully to see what you’re covered for and what’s excluded.   

What other types of business insurance might I need?

Employers’ liability insurance
You’re legally required to have this insurance even if you employ just one person. Your policy must cover you for at least £5 million and come from an authorised insurance provider. You could be fined £2,500 for every day you’re not properly insured.

Business interruption insurance
To help compensate you for loss of profits if your business is unable to operate for an unexpected reason.

Business life insurance
Insurance designed to help your business carry on if something happens to you or the key people in your business.

Personal accident cover
Pays out a lump sum if an accident at work means you or an employee are permanently unable to work.

Professional indemnity insurance
Covers you for claims resulting from negligence

Business van insurance
Your van is an essential tool of your trade – van insurance can help protect it.

Commercial property insurance
Cover for landlords of business premises.

Business contents insurance
Covers office and manufacturing equipment, furniture, and staff and client belongings.

Tools and equipment
Covers the tools and equipment you need to do your job from theft, loss or damage.

Legal expenses cover
To help you pay legal costs for employment and property disputes, or tax investigations, for example. This might already come with your business insurance, or you may be able to add it on for an extra cost.

Product liability insurance
Covers you if a product you supply or manufacture causes injury to someone or damage to their property.

Home office insurance
The insurance you need when you run your business from your home.

Frequently asked questions

When might someone make a claim against me?

There are lots of situations when builders might find themselves facing a claim. For example:

  • If a member of the public is injured or even killed as a result of your work. This could happen if equipment is left on a path and someone trips over it.
  • If your work damages someone else’s property. You might put a ladder through someone’s window or scratch and dent a car.

How much cover should I get?

That’s up to you and depends on the size of your business. A small to medium-sized business might get cover from between £1 million and £10 million. The higher your cover, the higher your premium will be, but it’s generally better to have too much cover than not enough.

What if I’m self-employed?

If you’re registered as a sole trader, you’ll need to get your own public liability insurance.

Ideally, you should also consider taking out additional insurance to protect your income or business if something happens to you. You might want to consider:

Do builders need employers’ liability cover?

If you employ anyone, other than yourself and family members, then it’s a legal requirement to have employers’ liability cover. This could cover you for compensation claims if your employee suffers a work-related injury or illness.

The Health and Safety Executive (HSE) reported 40 deaths and 61,000 injuries to construction workers in 2019/2020. In such a high-risk industry, protecting the financial future of your business is vital.

And once your policy is in place, be sure to check the latest health and safety requirements to ensure both you and your employees remain safe, as well as ensuring your insurance remains valid.

Does public liability insurance cover any injuries or damage caused by my employees?

Yes, damage or injuries caused by your employees while at work should be covered.

How can I protect my equipment?

Even the smallest construction company will own a huge array of tools and equipment, which will be expensive to replace if they’re stolen or damaged. The right tool and equipment insurance will protect you, should that happen.

If you transport your tools in your van, you’ll also want to make sure they’re covered by your commercial van insurance.

What if I’m working on a big job? Do I need extra insurance?

If you’re working on a large refurbishment, you might want to consider contract works insurance. It's designed to cover work in progress on a building site. This could protect you if you need to restart the job due to theft, fire, flooding, a storm or malicious damage. For example, if you had part-built a wall and a storm blew it over, contract works insurance could cover the cost of redoing the work, the cost of materials, labour and tools to put back the situation to how it was before the incident happened.

However, it won't cover damage to any existing structures on the site. So, for example, if you’re building a new extension and there’s a flood, it could cover the extension you’re building – but any damage to the main house should be covered by the homeowner’s buildings insurance.

What can affect the cost of my builders’ insurance policy?

There are a number of things that can affect the cost of your builders’ insurance including:

  • How long you’ve had your building business for
  • If you work in dangerous environments
  • If you work with dangerous materials and substances
  • Extra cover you want to add to your policy
  • The value of your tools and equipment
  • Your claims history

Prices can vary between insurance providers and will depend on your specific business. However, it’s important to choose a policy that’s tailored to your working needs, not just based on the cost alone.

How can I compare builders’ insurance quotes?

At Compare the Market, you can save time and money by comparing and buying the right cover for you and your business. And it's easy to do. Simply answer a few questions about your business and we'll pull together some quotes.

How much does builders’ public liability insurance cost?

The premiums you pay for public liability insurance depend on the level of cover you need, and whether you need any extra cover. Policies will have a cap on the maximum amount they’ll pay out for a claim – called an indemnity limit. Typically, the higher the limit, the higher the premiums you’ll pay.

You could save on your premiums by opting to pay a higher excess, but that will mean you’ll need to pay more towards a claim, so make sure you can afford to do that.

Remember that it’s not necessarily the cheapest policy that’s best – you want to find the right level of cover for your business.

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What do I need to get a quote?

To start comparing builders’ public liability insurance you’ll need to give us the following information:

  • Your company name and address
  • Details of your industry
  • Whether you’re a limited company, a partnership or a sole trader
  • Information about your employees and any contractors you use
  • The annual turnover of your company
  • The level of cover you need and any additional cover you’d like to include

We’ll also need a few personal details from you, unless you’ve compared with us before, in which case we’ll fill those in for you.

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Emily Kindness

Business insurance expert

What our expert says 

"Public liability insurance is especially important for builders. Working on other people's property and often in contact with the public can leave you exposed to claims. Combine that with the nature of the work and the use of power tools and heavy-duty equipment, you'll want to protect yourself against any accidents you could be held responsible for."

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