Pre-Start Essentials: Insurance

Building sites can be dangerous places and as the owner of such a site, you will need to take precautions against liability claims resulting from accidents and injuries that could occur on your new plot. In addition, you'll want to protect your inprogress development from natural calamity or theft; also, particularly if youre storing things on site, youll want protection against possible theft of equipment and materials. Many lenders expect to see site insurance on a plot or property they are lending against, and while legally it is not essential, it is strongly recommended.

You should look, as a result, for mentions of the following in the policies you sign up to: Public Liability (usually up to £5m); Contract Works Insurance (which covers your site for theft, etc); and, if you intend to directly employ subcontractors, Employer's Liability (usually up to £10m). If you are employing a main contractor to run the site for you, you should check to see whether he has relevant Employers and Public Liability even if he has, it is still worth ensuring that your own insurance is in place.

Thankfully, there is now a handful of companies who provide specialist self-build site insurance effectively a shorthand version of all of the above terms together. A typical selfbuild insurance would provide cover for:

• Building in construction to its full value; tools owned by the self-builder (up to £30,000)

• Any property hired by the self-builder (up to £30,000); site huts; temporary buildings incl caravans (up to £30,000)

• Contents cover for the above (up to £5,000)

• Personal accident (up to £10,000)

• Public liability (up to £5m)

• Employers liability (up to £10m)

• Legal expenses (up to £50,000)

Cover tends to run out upon completion of the project, although some lenders do extend the insurance to full building and contents cover for a few months if the project finishes early. One particularly interesting development in this market is Self-build Zones Flexi Policy, launched in June, which allows a pick 'n' mix approach to what cover you want and the time period you need it for, which can have a big impact on premiums.

Barn converters and extenders have traditionally struggled to find adequate insurance but many of the main self-build insurers now offer suitable cover, providing coverage for the full value of the existing structure as well as the new part. Be aware that your insurer understands the inherent value of the planning permission on unconverted barns i.e. if your unconverted barn burns down, your planning permission for a conversion is theoretically revoked as there is no structure left to convert, and you would be left with a worthless bit of land.

Read the Rest of the Pre-Start Essentials Guides:

• Mortgages
• Warranties

Further reading:

• A Guide to Starting a Self-build Project
• All About Self-build
• Building Contracts: When Things Go Wrong

Further contacts:

• Aon - Specialist Home Insurance