Reviewed by Matthew Bartlett, Director · Last reviewed 9 July 2026
Construction companies carry director-level exposure that has been widened materially by the Building Safety Act 2022, and further pressed by the pattern of contractor insolvency that has run through the sector since 2023. This entry sets out how the BSA reaches the boardroom, how contract disputes and insolvency-linked claims attach to directors personally, and where D&O sits alongside contract works, employer’s liability, professional indemnity and product liability cover for a construction business.
Companies Act 2006 duties apply to construction directors on the same terms as any other sector. Building Safety Act 2022 section 135 extended the limitation periods for claims under the Defective Premises Act 1972, opening a longer window in which a director’s decisions on specification, sub-contracting, remediation and disclosure can be tested by developers, freeholders and leaseholders long after handover. The BSA 2022 accountable-person regime under Part 4 imposes duties directly on those responsible for higher-risk buildings, and where those persons are the company’s directors the enforcement risk is personal.
The Health and Safety at Work etc. Act 1974 remains the dominant regime for site-safety exposure. Section 37 exposes directors to personal prosecution where a corporate offence is proved to have been committed with their consent, connivance or attributable to their neglect. Section 7 imposes duties on senior officers as employees. Sentencing under the Definitive Guideline for Health and Safety Offences (2016) has widened the range of penalties available against individuals.
Insolvency exposure is unusually high in construction. Wrongful trading claims under Insolvency Act 1986 section 214, misfeasance under section 212, and Company Directors Disqualification Act 1986 section 6 proceedings arrive in waves after a sector correction. Directors’ personal exposure runs through the whole administration process, and D&O is often the only wall standing between an ex-director and their own assets.
Side A covers the individual director when the company cannot or will not indemnify — which in an insolvent construction business is the default position. Side B reimburses the company for indemnifying its directors where the company can still lawfully do so. Side C responds to securities claims for listed construction groups. Extensions worth attention are pre-claim investigation costs (HSE enquiries, Environment Agency enquiries, adjudication and arbitration disclosures), employment practices liability, outside directorship for group and JV structures, and specific extensions for insolvency-related legal costs.
Deliberate dishonesty, fraud and improper personal profit are excluded once established by final adjudication. Prior known circumstances are excluded — and given the volume of contractual documentation, adjudication awards, and open subcontractor disputes at a typical inception date, the fair-presentation obligation is broad. Bodily injury and property damage sit on employers’ liability, public liability and contract works policies. Fines and penalties that are not insurable as a matter of English public policy fall outside cover. Claims by one insured against another are excluded save for standard carve-outs.
Building Safety Act 2022 — section 135 (extended limitation for defective premises claims); Part 4 (accountable-person regime); section 130 (definition of accountable person). Defective Premises Act 1972 section 1. Construction (Design and Management) Regulations 2015 (client, designer, principal designer, contractor duties). Health and Safety at Work etc. Act 1974 sections 2, 3, 7 and 37. Corporate Manslaughter and Corporate Homicide Act 2007. Housing Grants, Construction and Regeneration Act 1996 (adjudication). Companies Act 2006 sections 171-177. Insolvency Act 1986 sections 212-214. Company Directors Disqualification Act 1986 section 6. Insurance Act 2015 sections 3, 7 and 8.
D&O covers the director’s decisions in running the construction company — site safety governance, procurement, financial disclosures, sub-contractor management, insolvency-approach conduct. Contractor PI (where the company delivers design as well as build under a design-and-build contract) covers the professional-services element of the delivery. Where a director is separately named in a shareholder or regulator action, D&O picks up the individual defence while the operational policies pick up the underlying claim. A specialist broker aligns the wordings across the tower.
A regional principal contractor enters administration after a series of adjudications go against it and cashflow tightens through the second half of a year. The administrator sends a section 214 (wrongful trading) letter before action to the two remaining executive directors, alleging that they continued to trade after the point at which they knew or ought to have concluded that there was no reasonable prospect of avoiding insolvent liquidation. Personal defence of both directors through the pre-action correspondence, subsequent High Court application and any parallel section 6 CDDA 1986 disqualification proceedings falls on the D&O tower. Side A responds because the company is now insolvent and cannot indemnify; the pre-claim investigation extension picks up counsel from the day the letter before action arrives. Wording of the ‘final adjudication’ standard on the fraud exclusion matters — if the eventual court finding goes against the directors, defence costs incurred to that point may become repayable.
Apex Insurance Brokers is FCA authorised (FRN 724952) and places D&O for UK construction companies from principal contractors through to specialist subcontractors, design-and-build firms and residential developers. We work with Lloyd’s syndic