Insuring your home during a home refurbishment project

Like with many things in life it is a good idea to hedge your bets. Doing a home refurbishment is no different. Any building project is susceptible to an element of haphazardness and the price for things going wrong, such as a fire or a wall collapsing, can be enormous.

Before works are undertaken it is important to recognise that in most instances, your existing home insurance and contents cover will be insufficient to provide cover if you are conducting a home refurbishment as such works would not have been envisaged in the original policy.  Accordingly it is sensible to start from the position that your household insurance will not cover any damage to your home or neighbour’s property caused by building works, renovations, alterations or repairs.  Further your household insurance will not cover materials that are to be fitted during any works or the cost of labour that may be required to make good any damaged items. Your current insurer should be contacted to check what cover is included in the policy and whether additional cover can be obtained.

Not only should the property and works (including materials) be insured but additional risks involving other parties, such as the general public and the building team, need to be covered by employers and public liability insurance.

Many people believe that by employing a contractor to carry out the works suitable insurance cover will be provided but great care is needed and I would always suggest that an employer should fully check any insurances that a contractor may have and then ensure that further insurance is obtained to cover any elements that the contractor’s insurance does not.

It should be remembered that even where a contractor is engaged to refurbish your home, you the home owner, will still need to acquire cover for your own obligations and liabilities throughout the life of the project.  Building or Renovation insurance can be obtained from many insurance brokers, I list of some websites worth looking below.

Having set out the basic position above, it is worth taking the following steps:

1.Existing Building

Advise your current household insurer that works are to be carried out and ask whether they can extend cover to include for such works and damage that may occur.

Ensure that your contractor has public/products liability insurance which is current and will cover the full term of the works being carried out.  In the case of renovation works I suggest cover should be at least £1,000,000.

Check that the contract does not waive any rights that you may have against the contractor for damage to your home or neighbouring properties.  It is very likely that allowing any waiver of your rights against the contractor will invalidate your own insurance and leave you exposed.

2.The Building/Renovation Works

You as the householder and employer will be responsible for insuring the building works to be carried out and this will include materials and labour costs.  A specific policy can be taken out to insure for these risks and indeed the building contract may specify the insurance to be obtained and by whom.  If a JCT Minor Works Contract or similar is used the insurance provisions will allow for a number of different possibilities.  These may include the employer/householder, to insure, the contractor to insure or a joint names policy to insure the works.  It is imperative that the actual obligations and liabilities set out in the contract are reflected in the insurance cover obtained.  It is therefore wise to provide your insurance broker with a copy of the actual insurance provisions set out in the contract to ensure that appropriate cover has been obtained.

Any differences between the insurance cover obtained and the obligations of the employer, householder, and the contractor as set out in the contract will result in the householder being exposed to liability and costs that neither the contractor nor the insurer will accept.  The insurance should, if possible, specifically refer to the contract obligations that are being covered.

Notwithstanding the above it is always sensible to ensure that the contract provisions allow for and that agreement is obtained for joint names insurance, this is sometimes referred to as project insurance.  If possible a joint names insurance should cover for specified perils, i.e. fire, lightning, storm, flood, etc as well as the contractor’s negligence and professional fees.  If professional fees are not included the householder could find themselves responsible for all such costs which arise from any insurance claim.

3.Personal Injury, Death and Damage to Property

It is normal in a building/renovation contract for the contractor to be responsible for insuring his workforce and other parties engaged by him against personal injury, death and damage to property caused by them.  This is not normally cover that an employer/householder can obtain themselves.  Accordingly the householder must obtain evidence of the contractor’s insurance policy and that it is not only current but will be in place throughout the length of the project.

In conclusion, whenever building, refurbishment or renovation works are to be carried out the householder must protect themselves against the risks involved in carrying out such works.  To simply rely on the contractor’s assurances that he carried adequate insurance cover is to leave yourself exposed to many difficulties should an insurance type claim arise and the possibility of painful and extensive legal difficulties in sorting such matters out.  It will be no good saying that the contractor assured you that he was covered when this was in fact not the case.  It is the householder’s responsibility to ensure that the contractual obligations as set out in the contract are properly insured and that no obvious gaps in cover are left.  It is without doubt worth spending a bit of time understanding what insurance is required and to then ensure that such cover is obtained and that the contractor does have appropriate cover for his obligations.

I hope this has helped making understanding insuring your home during a home refurbishment project easier. Below I list some companies that provide building and renovation insurance. If you are considering a home refurbishment project then please visit www.onisliving.co.uk for a complete one stop shop solution.

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About the Author

Robert A Sliwinski, Bsc, Llb (hons), Dipintarb, Frics, Fciarb, Frsa, Barrister, Solicitor, Attorney (new York)

Robert is a Chartered Quantity Surveyor, Chartered Arbitrator, Solicitor and Barrister,and is also amongst the leading adjudicators in the...