Property and construction

Insurance for property developers

A developer needs a programme of covers, not one policy: usually property owners’ liability and cover for the site or existing building from the day they buy, contract works insurance once building starts (unless the contractor insures the works), employers’ liability if they employ anyone, and a structural warranty or latent defects policy for buyers and lenders. Professional indemnity and directors’ and officers’ cover come in where the company designs or an SPV has investors.

Part of: Commercial insurance

In short

Cover changes as a scheme moves from purchase to build to sale. The building contract sets who insures the works, and your lender will usually want its interest noted on the policies it relies on. As client under CDM 2015 a developer has its own legal duties, and if it fails to appoint a principal designer and principal contractor on a project with more than one contractor, it must carry out their duties itself. Developers of dwellings owe buyers a duty under the Defective Premises Act 1972 that can be enforced for up to 15 years after completion.

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The covers a developer needs, stage by stage

Last reviewed 7 October 2026 by the Apex commercial team.

Start from the stage the scheme is at and who holds the risk at that point.

Cover	Who needs it	What to check
Property owners’ liability	The company that owns the site, from exchange or completion of the purchase	That it starts when the risk passes to you, and covers trespassers and visitors on a vacant site.
Unoccupied or existing buildings cover	Owners of a building awaiting conversion or refurbishment	Unoccupancy conditions, such as regular inspections and draining water systems, and whether cover for the existing structure continues once works start.
Contract works (contractors’ all risks)	Whoever the building contract makes responsible: you or your contractor	The sum insured covers the full rebuild of the works, materials on site and professional fees; joint names where the contract requires it.
Public liability	Developers who manage works or employ trades directly, as well as every contractor	The limit your contract, lender and neighbours’ agreements ask for, and any exclusions for heat work, demolition or excavation.
Employers’ liability	Any developer that employs people, including directly employed site staff	At least £5 million of cover, and whether labour-only workers count as your employees.
Structural warranty or latent defects insurance	New-build and most conversion schemes selling to buyers who borrow	That it is arranged before work starts; most providers need to inspect from the foundations.
Professional indemnity	Developers who design in-house, take on design risk or sell with advice	That the policy describes development activity and what happens to design after a contractor or designer is novated.
Directors’ and officers’ liability	Development companies and SPVs, especially with investors or joint venture partners	Whether it continues, as run-off, after an SPV is wound up.

Every cover is subject to the insurer’s acceptance and the policy terms. For the full detail on construction cover see contractors’ all risks insurance.

Who insures the works: you or your contractor?

The building contract sets who insures the works. Read its insurance clause first: a gap can leave a half-built scheme uninsured.

Contractor insures. Common on new build with a main contractor. Ask for the schedule, not a certificate, and check the contract value limit, the excess and that your interest (and your lender’s) is noted. An annual contractor’s policy may have a per-contract limit lower than your build cost.
You insure. Common where you manage trades yourself or on refurbishments, where the contractor’s policy often excludes the existing building. A single-project contract works policy can run for the length of the programme.
Existing structures. On a conversion, the building you are converting is usually not “the works”. Someone still has to insure it against fire, flood and the effects of the works, and the unoccupied buildings policy you held before the build may change or end once works begin. Tell that insurer before work starts.

Excavating near neighbours brings a further gap. Ask whether cover is needed for damage to neighbouring property that happens without anyone being negligent, such as settlement during underpinning. Public liability usually needs negligence; some building contracts ask for this separate cover.

How claims arise on a development

The examples below are illustrative. They show the kinds of loss developers face, not real claims or outcomes.

Fire before the scaffold went up. A former office bought for conversion sits empty awaiting planning. Intruders start a fire. The insurer asks whether the inspection and security conditions on the unoccupied buildings policy were met.
The contractor’s cover stops short. A storm damages a half-built timber-frame block. The contractor’s annual policy has a contract limit well below the build cost, and the developer had relied on a certificate without reading the schedule.
The neighbour’s cracked wall. Basement excavation causes movement next door. The neighbour claims repairs and alternative accommodation from the developer as building owner under the Party Wall etc. Act 1996.
A fall from an open stair core. A labourer paid directly by the developer falls on a site with no principal contractor appointed. The injured worker claims against the developer as employer, and HSE investigates the client’s arrangements under CDM 2015.
Water ingress three years on. Purchasers of new flats report water coming through balcony thresholds. They claim under the Defective Premises Act against the SPV that developed the block, and the SPV has distributed its profits.
Investors fall out. A scheme runs over budget and a minority investor in the SPV alleges the directors misled them about the cost plan and sues them personally.

The legal duties that drive a developer’s risk

Much of a developer’s exposure comes from law that applies because you are the client, whether or not you lift a tool.

Rule	What the text says	What it means for a developer
CDM 2015, regs 2 and 4	A client is any person for whom a project is carried out; a domestic client is one for whom it is not in the course or furtherance of a business. Clients must make suitable arrangements for managing the project, provide pre-construction information and ensure a construction phase plan is drawn up.	A developer is a commercial client, even when building homes. The duties stay with you; they cannot be passed to the contractor as a domestic client’s can under reg. 7.
CDM 2015, reg. 5	Where more than one contractor is, or will foreseeably be, working on a project, the client must appoint a principal designer and principal contractor in writing before the construction phase. If it does not, the client must carry out their duties.	Managing your own trades without these appointments leaves you holding both roles.
CDM 2015, reg. 6	A project must be notified to HSE if the work is scheduled to last longer than 30 working days with more than 20 workers at any one time, or to exceed 500 person days.	The client notifies.
Employers’ Liability (Compulsory Insurance) Act 1969	Every employer carrying on business in Great Britain must insure against liability for injury to its employees. GOV.UK states the cover must be for at least £5 million.	An SPV with no employees may not need it; the parent company that employs site staff does.
Party Wall etc. Act 1996, ss.6 and 7	Notice is needed at least one month before excavating within three metres of a neighbour’s building below its foundations, or within six metres in some cases. The building owner must compensate adjoining owners and occupiers for loss or damage resulting from work under the Act.	Compensation under s.7 does not depend on proving negligence, which is why the neighbour gap above matters.
Defective Premises Act 1972, s.1	Anyone taking on work for or in connection with the provision of a dwelling owes a duty to do it properly so the dwelling is fit for habitation. A person who arranges for another to take on the work is treated as having taken it on.	You owe buyers this duty even though your contractor did the work.

The CDM duties apply in Great Britain. The Party Wall etc. Act 1996 applies in England and Wales. If a principal designer appointment is part of your plan, see PI for CDM principal designers.

SPVs, lenders and directors

Many developers run each scheme through a special purpose vehicle (SPV). That ring-fences the scheme but not all of the liability.

Name the right company. The policyholder should be the company that owns the site and signs the building contract. A policy in the parent’s name may not respond to a claim against the SPV.
Lenders. Development finance lenders usually set insurance conditions in the facility agreement: which covers, minimum limits, and their interest noted or named as loss payee. Send that clause to your broker early; drawdown can depend on it.
Building liability orders. Under sections 130 and 131 of the Building Safety Act 2022, in force since 28 June 2022, the High Court can make an order, if it is just and equitable, making an associated company jointly and severally liable for certain liabilities of the original company, including Defective Premises Act liabilities and liabilities arising from building safety risks. A company is associated if one controls the other or a third company controls both. Winding up an SPV may not end the group’s exposure.
Directors. D&O for property companies usually responds to claims against directors personally, such as allegations from investors, joint venture partners or regulators, subject to the policy terms. Ask about run-off when an SPV closes.

Developers of blocks of flats in England also need to know about remediation contribution orders. Under section 124 of the same Act, the First-tier Tribunal can order a developer, or a company associated with it, to pay towards remedying defects in a building with at least two dwellings that is at least 11 metres high or has at least five storeys. See our guide to BSA developer remediation.

Design, completion and the long tail after sale

A developer’s liability usually outlasts the scheme.

Design responsibility. If you design in-house, change a consultant’s design, or promise buyers anything about the building’s performance, ask about PI. On design and build, the contractor normally takes design responsibility under the contract, but buyers can still pursue you. Our page on PI for property developers covers this.
Structural warranty. Buyers’ mortgage lenders commonly expect a structural warranty on new homes. It usually has to be in place before work starts. See latent defects insurance for how it works.
Unsold units. After the contract works cover ends at handover, completed but unsold units still need buildings and liability cover until each sale completes.
The health and safety file. Under CDM 2015 reg. 4(7), a client that disposes of its interest in the structure meets its duty by passing the file to the new owner and making sure they know what it is for.
Limitation. Section 135 of the Building Safety Act 2022 gives buyers 15 years to sue under the Defective Premises Act for work completed after 28 June 2022, and 30 years for claims that had already accrued before that date.

What to send a broker for a quote

A development is underwritten on the scheme, not just the company. Send this in one email:

Site: address and postcode, whether it is vacant land or an existing building, and its current use and occupancy.
Scheme: new build, conversion, refurbishment or extension; residential, commercial or mixed; number of units and storeys.
Values: purchase price, build cost and gross development value (GDV).
Programme: purchase date, start on site, planned completion and expected sales period.
Contract: the form of building contract, who it says insures the works, and the contractor’s insurance schedules.
Design: who designs what, whether design and build or novation is planned, and who holds the principal designer role.
Finance: the lender’s insurance requirements, and any investor or joint venture structure in the SPV.
Track record and claims: schemes completed in the last five years and any claims or defects disputes.

Mention any covers you already hold, such as employers’ liability through a group policy.

What insurers will ask you

A complete proposal gets better terms than a bare one, and a broker can only present what you tell us. Have these ready:

How long the site has been or will be empty, and what security, inspections and fire precautions are in place.
Whether any demolition, basements, piling, underpinning or work on party walls is involved.
Whether the works include timber frame, modular units or other methods of construction that change the fire risk during the build.
Whether the site is in a flood risk area or has flooded before.
Who the principal contractor is, and whether you directly employ or pay any site labour.
Whether any residential block is 11 metres or more in height, or has cladding or external wall work.

Speak to a broker

Development cover, placed by a named broker

Send us your current schedule, or tell us about the property if you are arranging cover for the first time. Or leave your number and a named broker will call you back, usually the same working day.

Start your quote →or call 0117 325 0027

How Apex places this cover

Apex Insurance Brokers is an independent insurance broker based in Bristol, established in 2009 and authorised and regulated by the Financial Conduct Authority. We are not tied to one insurer: we work with over 30 markets, including Lloyd’s syndicates through wholesale brokers, and every client has a named broker who handles the placement, mid-term changes, certificates for clients and the renewal.

A short fact-find. We ask what you actually do, for whom, under what contract terms, and what has gone wrong before.
A written presentation to insurers. Under the Insurance Act 2015 you must make a fair presentation of the risk. We help you meet that duty, and a well-presented risk gets better terms.
Quotes you can compare. Limits, excesses, retroactive dates, exclusions and premium side by side, with a plain-English recommendation.
No gap in cover. If you are moving from another insurer or broker, we line up the new policy to start the moment the old one ends.

Related guides

Sources

Frequently asked

What insurance does a property developer need?

Usually property owners’ liability and cover for the site or existing building from purchase, contract works once building starts unless the contractor insures the works, public liability, and employers’ liability if you employ anyone. Add a structural warranty for new homes, PI if you design, and D&O for the development company.

Who should insure the works, the developer or the contractor?

Whoever the building contract says. On new build the main contractor often insures the works; on refurbishments and conversions the developer often insures them together with the existing building. Check the schedule and that your lender’s interest is noted.

Is a property developer a client under CDM 2015?

Yes. A developer is a commercial client because the project is carried out in the course of its business. It must make suitable arrangements for managing the project and, where more than one contractor is involved, appoint a principal designer and principal contractor in writing. If it does not, it must carry out their duties itself.

Does a development SPV need employers’ liability insurance?

Only if it employs people. The Employers’ Liability (Compulsory Insurance) Act 1969 applies to employers carrying on business in Great Britain, with cover of at least £5 million. Many SPVs have no staff, but the company that employs your site team or directly paid labour does need it.

Can a developer still be liable after selling the homes?

Yes. Under the Defective Premises Act 1972, a developer that arranges work on dwellings owes buyers a duty that the work is done properly. Buyers can sue for up to 15 years after completion. Since 2022 the High Court can also extend some liabilities of an SPV to associated companies through a building liability order.

Do I need insurance while the site is empty before building starts?

Usually, yes. From the point the risk passes to you, you are responsible for injuries to visitors and trespassers and for damage to any existing building. Unoccupied property policies often carry inspection and security conditions.

Ready to compare cover?

Apex arranges insurance for property developers across the UK. Tell us about your site, scheme and contract and we’ll find cover that fits. Or call 0117 325 0027.

Start your quote Call 0117 325 0027

Apex 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. Cover is always subject to the insurer’s acceptance and the policy terms, and this page does not guarantee that cover will be available or on what terms.