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Construction & contractors
Construction and contractor insurance is not one product but a programme built around the trades you carry out, the sites you work on and, above all, the contracts you sign — contract works, the plant you own and hire, the liabilities you owe on site, and the cover your building contract specifically demands. A broker matters here because it is the insurance clause in a JCT or NEC contract, not the price of a public liability policy, that sets what you actually have to buy, and getting it wrong can leave you both in breach of contract and uninsured for the works themselves.
Part of: Construction insurance guide
In short
Construction and contractor insurance is layered rather than a single policy. A working programme usually combines contractors' all risks (CAR) or contract works cover for the building and materials, owned and hired-in plant and tools, public and products liability, and employers' liability at the statutory minimum of £5m. Design-and-build or any design element needs professional indemnity. The mistake that most often leaves a firm uninsured is running on a bare public liability policy when the building contract does not permit it: a JCT or NEC contract typically requires all-risks cover in the joint names of employer and contractor, non-negligent liability under JCT clause 6.5.1, and specified limits. Miss those and you are both in breach of contract and uninsured for the works themselves. A broker should read the insurance clause before quoting.
Signed a JCT or NEC contract? Send us the insurance clause — we’ll match the cover to it. Or call 0117 325 0027.
Get a quote Call 0117 325 0027Construction and contractor insurance is not a single policy. It is a programme of covers assembled around the trades you carry out, the sites you work on and, crucially, the contracts you sign. A jobbing builder, a groundworks specialist, a principal contractor running a JCT project and a developer commissioning a new building all need different combinations, and the same firm often needs a different combination from one project to the next.
Broadly, the programme falls into three groups: cover for the physical works and the things you bring on site, cover for the liabilities you owe to other people, and the specific cover your building contract obliges you to arrange. Most disputes and uninsured losses come from that third group being treated as though it were optional.
A useful discipline is to start from the contract rather than the price. The insurance clause in a building contract sets out precisely what must be in place, in whose names, and for how much; it is the document that should be read before a policy is quoted, because cover that is cheaper but does not answer the clause is worth little the moment a dispute arises.
The covers below form the backbone of most contractor programmes. Which of them you need, and at what limits, depends on your trade, your turnover, the value of the contracts you take on and what those contracts demand.
| Cover | Why it matters on a construction project |
|---|---|
| Contractors' all risks (CAR) / contract works | Insures the works under construction and the materials on site against loss or damage — fire, flood, storm, theft, vandalism and accidental damage — up to reinstatement. Without it, a fire the week before completion falls on whoever is contractually responsible for the works. |
| Owned plant and machinery | Covers excavators, cabins, generators and similar equipment you own against damage and theft. Plant left on site overnight is a frequent target and a frequent claim. |
| Hired-in plant | Standard hire agreements make you responsible for hired equipment while it is in your charge, including continuing hire charges that keep running while a damaged item is repaired or replaced — a cost many contractors do not realise they have accepted. |
| Tools and equipment | Covers hand tools and smaller equipment, typically in transit, in the van and on site. Theft from a vehicle overnight is a common exclusion and needs checking rather than assuming. |
| Public liability | Responds to claims from third parties for injury or property damage caused by your work — a member of the public, a neighbour or the client. It answers claims founded on your negligence. |
| Products liability | Covers injury or damage caused by materials or components you have supplied and installed, after you have left site. Relevant to any trade that supplies and fits. |
| Employers' liability | Legally required if you employ anyone, including most labour-only subcontractors, with a statutory minimum of £5m. It covers claims from workers injured or made ill by their work. |
| Professional indemnity | Needed wherever you carry design responsibility — design-and-build, a contractor's design portion, or advice on specification. It covers claims arising from design error, which liability and works policies exclude. |
| Non-negligent liability (JCT 6.5.1) | Covers damage to neighbouring property caused by the works — collapse, subsidence, heave, vibration, removal of support — where you have not been negligent, so public liability does not respond. Required by name in many JCT contracts. |
Two points are worth drawing out. First, several of these covers overlap in ways that create gaps: public liability answers claims based on your negligence, but not damage that happens without fault, which is exactly what non-negligent liability under JCT clause 6.5.1 exists to catch. Second, employers' liability reaches further than a payroll — labour-only subcontractors who work under your direction are usually treated as your employees for this purpose and must be insured accordingly.
Want your contract’s insurance requirements checked before you sign? Or call 0117 325 0027.
Get a quote Call 0117 325 0027Standard-form building contracts do not leave insurance to the parties' discretion. They set it out in a schedule, and signing the contract is a promise that the stated cover is in force. The two families you are most likely to meet in the UK are the JCT (Joint Contracts Tribunal) suite and the NEC (formerly the New Engineering Contract).
JCT insurance options. The JCT contracts deal with insurance of the works through three alternative options, and only one applies to any given project:
Two phrases in those options do a great deal of work. Joint names means the policy is issued in the names of both employer and contractor, so both are insured parties and the insurer cannot then pursue one of them for a loss it has paid the other — a waiver of subrogation. A public liability policy in your name alone does not satisfy a joint-names requirement. All risks means cover for the works themselves, which a liability policy never provides.
Non-negligent liability, clause 6.5.1. Where the contract particulars require it, JCT clause 6.5.1 — the provision long known as 21.2.1 — calls for a separate joint-names policy covering damage to third-party property caused by the works in the absence of negligence: collapse, subsidence, heave, vibration, weakening or removal of support, and the lowering of ground water. Because there is no negligence, a standard public liability policy would not respond, which is the whole reason the clause exists. It is most relevant on projects involving excavation, demolition, piling or works close to neighbouring buildings, and the premium usually falls to the employer.
NEC contracts. The NEC Engineering and Construction Contract reaches a similar end by a different route. It requires the contractor to provide the insurances set out in the contract's Insurance Table — covering loss of or damage to the works, plant and materials; loss of or damage to equipment; liability for damage to property and to third parties; and liability for death of or injury to employees — each for the amount of cover stated in the Contract Data. As with JCT, cover is generally required in joint names with a waiver of subrogation, and it must run from the starting date until the defects certificate is issued, which is after practical completion.
The mistake that undoes contractors. The single most common and most serious error is running a business on a bare public liability policy and assuming it satisfies the contract. It does not. When a JCT or NEC contract calls for all-risks cover on the works, in joint names, with non-negligent liability and specified limits, a public liability policy leaves you in breach of the contract you have signed and, at the same time, with no cover at all for the works if they burn, flood or collapse. Reading the insurance clause and matching every requirement — the option, the names, the perils, the limits and the run-off — before the contract is signed is the step that prevents this, and it is why the clause should be in front of a broker before a quote is given.
Beyond the headline covers, a handful of exposures account for a large share of declined claims. They turn on how a policy is set up and what you disclosed, not on whether you bought insurance at all.
Labour-only versus bona fide subcontractors. Insurers treat the two very differently. A labour-only subcontractor works under your control, using your materials and direction, and is generally regarded as your employee — so they fall under your employers' liability and count towards your wage roll for rating. A bona fide (genuine) subcontractor runs their own business and should carry their own public and employers' liability. If you use bona fide subcontractors, your policy expects you to check and record that they hold their own cover; if they do not, claims can fall back on you, often at a higher excess. Describing your workforce accurately when you arrange the policy is one of the most important things you do, because a mis-description can void a claim.
Hired-in plant and continuing hire charges. Hire agreements — commonly on model terms such as those of the Construction Plant-hire Association — typically make you liable for damage to plant while it is in your possession and for the hire charges that continue while it is off the road. Cover needs to match the value of what you hire and to include those continuing charges, or a straightforward theft becomes an ongoing bill.
Design and the professional indemnity gap. The moment you take on any design — a design-and-build contract, a contractor's design portion, or simply advising a client on how something should be built — you carry a liability that public liability and CAR both exclude. Professional indemnity fills it. Design-and-build firms in particular are often required to hold it by the contract and by any collateral warranties they sign.
Environmental and pollution liability. Public liability cover for pollution is usually limited to sudden, accidental events. Groundworks, demolition, fuel storage and work on contaminated land can create gradual pollution exposures that need specific environmental cover, particularly where the contract or the site conditions call for it.
Terrorism. Damage caused by terrorism is generally excluded from standard property and works cover and insured separately, in the UK through the government-backed Pool Re scheme. JCT joint-names all-risks cover frequently has to include terrorism cover to satisfy the contract, so it is worth confirming rather than assuming.
Project-specific or annual. Most established contractors run an annual policy that covers all the contracts they take on during the year, up to a stated contract value and duration. A single, unusually large or long project — or one whose contract demands specific terms — may instead be insured on its own project-specific policy. Developers and one-off self-builders often take the project route. The right structure depends on your spread of work and the value of individual jobs, and a project that exceeds the limits of an annual policy needs to be declared rather than assumed to be included.
Higher-risk trades and the specialist market. Some trades are declined or heavily loaded by mainstream insurers because of their claims history: roofing and other work at height, demolition, groundworks and piling, and cladding and facade work, which has faced particular scrutiny since the building-safety reforms. These risks are placeable, but usually on the specialist market — including Lloyd's syndicates — where underwriters price the specific hazard rather than refusing the whole trade. Conditions covering hot works, working at height and method statements are common, and meeting them is part of keeping cover valid.
Cover that outlives the project. Some obligations begin only when the works finish. Latent defects insurance, also called a structural warranty, insures the completed building against the cost of putting right damage caused by defects in design, workmanship or materials that emerge years after completion — over a long policy period running from handover — without the owner having to prove who was at fault. Funders and buyers frequently insist on it for new commercial and residential buildings.
It is often set against, or combined with, collateral warranties. These are contractual: they give a third party such as a funder, purchaser or tenant a direct right to pursue the contractor or consultant under the original appointment. They depend on being able to prove a breach and on the other party still being solvent, whereas latent defects insurance pays out regardless of fault. Contractors and consultants are regularly asked to sign collateral warranties, and each one should be checked against what the professional indemnity policy will actually stand behind.
A non-standard or high-value commercial risk is advice-led. A specialist broker searches the market rather than one insurer’s panel, presents the risk properly — which matters under the Insurance Act 2015 duty of fair presentation — and gets the details that decide a claim right. Buying a packaged policy direct can be fine for a simple, standard risk; for the risks on this page it rarely is.
Apex Insurance Brokers is an independent commercial insurance broker established in 2009 and based in Bristol, owned entirely by its directors and directly authorised by the FCA since 2016. We are not tied to any single insurer or scheme, we do not run our own policy or underwriting, and we have no placement quotas. We have access to over 30 markets, including Lloyd’s syndicates via wholesale, which is what lets us place a non-standard, high-value or hard-to-place risk that a packaged insurer might decline. We usually return three or four competing quotes set out so you can compare them like for like, every client has a named broker from first quote to renewal, and every claim gets director-level attention rather than a call-centre queue.
Yes, because they do different jobs. Public liability covers injury or damage you cause to other people and their property; contractors' all risks (CAR) covers the works you are building and the materials on site if they are damaged or stolen. A public liability policy will not pay to rebuild works lost to a fire or flood, and most building contracts require all-risks cover on the works specifically.
A joint-names policy is issued in the names of both the employer and the contractor, so both are insured and the insurer cannot recover from one of them for a claim it has paid — a waiver of subrogation. JCT and NEC contracts commonly require the works to be insured in joint names. A policy in your name alone does not meet that requirement, even where the cover looks similar.
It is non-negligent liability cover, formerly known as clause 21.2.1. Where the contract requires it, you take out a separate joint-names policy for damage to neighbouring property caused by the works — collapse, subsidence, heave, vibration or loss of support — in situations where you have not been negligent. Ordinary public liability will not respond to a no-fault claim, which is why the clause calls for it, and the employer usually pays the premium.
If you employ anyone it is, with a statutory minimum of £5m. It also reaches labour-only subcontractors who work under your direction, because they are generally treated as your employees. Only a genuine sole trader with no staff and no labour-only help is likely to fall outside the requirement, and even then a contract may still insist on cover.
You do if you carry any design responsibility — a design-and-build contract, a contractor's design portion, or advising a client on how work should be done. Public liability and contract works both exclude claims arising from design, so professional indemnity is what stands behind that risk. Many contracts and collateral warranties require design-and-build contractors to hold it and to keep it in place for a period after completion.
Yes. A single, large or unusually long contract can be covered by its own project-specific policy, which is common for developers and one-off builds. Many contractors instead run an annual policy that covers all the jobs they take on during the year, up to a stated contract value and length. A project that exceeds those limits needs to be declared separately rather than assumed to be covered.
Usually yes, but often on the specialist market rather than through mainstream insurers. Higher-risk trades such as roofing, demolition, groundworks, piling and cladding are frequently declined or loaded by standard schemes, and are instead placed with specialist underwriters, including Lloyd's, who price the specific hazard. Conditions around hot works, working at height and method statements are common and need to be met to keep cover valid.
It depends on the type. Labour-only subcontractors who work under your control are treated as your employees and are covered by your employers' liability. Bona fide subcontractors run their own businesses and are expected to hold their own public and employers' liability; your policy will usually ask you to check and record that they do. If a bona fide subcontractor has no cover, a claim can fall back on you, so describing your subcontracting accurately when you arrange the policy is essential.
Latent defects insurance, or a structural warranty, is a policy on the finished building that pays to remedy damage from design, workmanship or material defects that appear after completion, without anyone having to prove fault. A collateral warranty is a contract that lets a third party — a funder, buyer or tenant — pursue the contractor or consultant directly, but only if they can prove a breach and the firm still exists. Funders often want one or both, and they are not interchangeable.
Send us your contract or tell us about the work you take on, and we will map the cover you need against what your JCT or NEC contract requires. Or call 0117 325 0027.
Get a quote Call 0117 325 0027Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information, not advice on your individual circumstances, and it does not guarantee that cover will be available or on what terms.
