Building Insurance and Warranties




There are a lot of things which can go wrong on a building site. This means that everyone involved needs to protect themselves. Chief among those protections is insurance.

What are the different types of risk?

PHYSICAL AND FINANCIAL

The physical risks involve the health and safety of you and your team. This mostly involves injuries. The financial risks involve the money side of things. How much risk is there with your site plans? Is it worth the coverage?

INJURIES

You run into two types of injuries here too. The first type of injury happens with you and your team. This involves the everyday injuries which occur, as well as injuries which are related to a specific situation.

TWO TYPES OF INSURANCE POLICIES

You need two types of policies. The first one should cover you and your team. This one is more of a general insurance policy. You and your team know what can happen each and every day on a building site. You still need to protect yourself though. This is why a general insurance policy is a good one to have in tow.

The second one is more for the public. Passer-byes tend to walk through at any given moment. What sort of protection do you have in place for these moments? You might not think anything of this now, but you will. People can say and do a lot. There are many who will claim and injury, just to get some money out of you. There are others who might have an issue with your building site being there from the start. People like this tend to have their own agenda.

There are lots of reasons why the public could claim negligence. This is why having this insurance policy in place is a good thing. It’s going to save you a lot of heartache in the end, not to mention money.

People are sued and taken to court at the drop of a hat these days. You need to be sure the reason is specific and true. This is what makes an insurance policy so beneficial. It can save you and your team from a lawsuit which is frivolous and unfounded.

Now that I have covered some of the basics of these policies, let’s look into the specifics.

EMPLOYER/EMPLOYEE LIABILITY




If you have just one person on your team, you are considered to be an employer. If any person on your team has an accident, it could be your fault. I’m not saying it is, but it could be. Some of these suits can be quite expensive. Depending on your team, you are required to have at least a general liability policy on hand.

Many of these cases can go for as high as £10 million pounds. This is very serious. Do you have this kind of money to cover it? It doesn’t matter if you are guilty or not, you need to protect you and your employees. Your employees are just like anyone else, they can say and do anything. As a boss, you need to handle this appropriately.

THE PUBLIC LIABILITY INSURANCE

This side of the insurance can be a bit more tricky. You don’t work with the public on a regular basis. At least with your employees you pretty much know what to expect. You might have a few bad apples in the bunch, but it’s nothing compared to what the public will bring.

The public comes with its own intentions. Sometimes they are good, sometimes bad. You have to pay more attention to what the public does. When it comes the public insurance, much of it falls into the “what if” category. Let me explain.

As you and your team build the site, different things can happen. The scaffolding might not be as secure as you think. There might be some mud that some passer-bye slipped into. Just this alone can cause them to file a law suit. Each one of us comes from a different place. What we feel might not be a big deal, might be a big deal to someone else.

Even if we assume some of the foundation is secure, something could happen. You need to protect yourself. This is why you need to have public liability insurance. Most of the standard insurance policies of this variation will cover you for about £2 million pounds. Any damage that occurs up to that point will be covered.

THE LENDER

When it comes to insurance, the company who ensures you must have a reason to do so. For instance, if your house costs more to build than to insure, the company won’t underwrite it. Most lenders will tell you your site is not a good risk. It needs to be profitable for them too.

THEFT

The other issue that happens with the insurance is theft. Theft happens all the time. It can be something small and insignificant to something big and major. The important thing to remember is that your insurance will only cover theft up to a point. What does this mean?

Insurance is not going to bother with the little things. If someone comes in and takes a wrench, don’t bother filing. Your insurance is going to look at this and go, “Just go buy a new one.” They are not going to think anything of it.

Now if someone comes in and takes something of substantial value, then this is where the liability comes in. You need to file on the bigger things. This is costing you a lot of money. Let the insurance take care of it. That is what this is in place for.

For the bigger stuff you will have to supply paperwork. You will need to provide proof of what happened. Which is why you need to keep accurate records on everything.

THE CONTRACT WORK




If you are bringing in someone to erect your home, you shouldn’t have to worry about anything. The one thing you might want to look into is risk insurance. The one thing you will need to worry about is the type of contract work you need.

If you are looking to just alter something which already exists, the insurance won’t cover it. The company will expect you to already have a regular building policy in place. They get very specific over this stuff.

CONVERTING SOMETHING OLD

Let’s say that there is an old barn you want to convert into something new. Let’s say you are filing the paperwork for it. There are some things you need to consider with this. What you are looking to do is seek planning permission, something which might have already been revoked. If you are planning to do this, you need to explain the difference to the insurance company. Some are okay with this, others are not.

You are not seeking to insure the value of the building. You are looking to cover the value of the planning. If you don’t, you might not get the coverage you might be entitled too.

YOUR INSURANCE OPTIONS

While many of these policies are not mandatory, they are recommended. Every person who applies has it’s own options. There are dozens of options too. Each one is specific to the needs of the building site.

There is so much risk that comes with each building site, you need to carefully weigh everything. Don’t just take the first thing that comes down the road. Talk to a perspective company. Tell them what your needs are. Let them know what you are looking to do and go from there.

If you get a few no’s in the beginning, this is normal. Just keep trying. Sometimes that no means it’s not the right policy for your building site.

THE COST FOR A SELF BUILDER

Some people prefer to build the house themselves. They don’t want to hire a crew to put it all together. Everyone has their own preferences. Sometimes doing things yourself will save you money in the long run. You still have to think about insurance though. Insurance will cover you for all incidentals.

If you are looking to build a 4-bedroom detached house, a standard policy comes in at $800 pounds. This comes down to .5 per cent of the value. Now if you are looking at a 2 or 3 bedroom house, it’s going to be less.

Look at this self-coverage as you would for a whole team. This coverage is what any building team would spend on their own site. The only difference is you are doing it all by yourself.

SELF-BUILDING JOBS COMPLETED

The one thing you need to keep in mind is what happens when the job is done. The policies you have in place will keep your covered, while the job is being done. Once the job is over, you have to transfer these policies to the standard coverage. Why? The coverage has ended. If you don’t switch over, you could run the risk of some liability.

SELF-BUILDER LIABILITY

Some assume there isn’t any liabilities for self-builders. This is a serious misconception. There are even more risks involved with self-builders, then there are with whole teams. You need to protect yourself. You could hurt yourself. You could hurt someone else accidentally. You could even hurt a neighbour. Some might not see the risk here. Neighbours can do weird and crazy things when money is involved. When a situation like this comes up, don’t assume this neighbour is still your friend. Everyone has an angle when insurance is involved. People can claim anything, even a so-called loyal neighbour.

WARRANTIES

Now let’s discuss warranties a little bit. Have you guys ever heard of the NHBC? This is the National Housebuilding Counsel. Think of it this way. When you buy a new computer, it usually comes with a warranty. This covers you for at least a year or two, if not more. It depends on what kind of warranty you apply for.

NHBC

The housing community used to be this way too. Back in the 30’s, when the recession hit, the housing community went bust. There wasn’t a lot of confidence in what was going on. There was just too much risk involved.

Well now things have changed. How so? There is more competition out there. More people vying to get back into the public’s good graces. The NHBC has been working to improve their terms and quality of coverage.

There are more options available now, whether it be for teams or self-builders. Warranties have become more attractive to people these days. How do they work?

THE WARRANTY

Basically, you draw up your plans and submit them for review. Once this happens they look them over. Sometimes they come back for a few revisions. This happens at least once or twice, usually no more. This process is scrutinized for a reason. The NHBC looks over everything in detail. They want to make sure they can agree with it too. It’s their money they are investing, the NHBC has a say in it too.

After the NHBC agrees to it, they will show up onsite. Think of it as a pre-inspection. These inspections don’t work like others do. These inspections are usually random. You will get a heads up, but only by a few hours or days. That’s it.

They want to see if your onsite plans are exactly what you sent over to them. Think of it as an added insurance policy. As I said, it’s their money. They want to see that your site is a good investment.

ONSITE POLICEMEN

Don’t think for one moment that these guys don’t have a say in what you are doing. They do. They can come in and make changes to your plans. They can suggest a redo, if necessary. Some may say this is not fair. To be truthful, it is fair. These guys have to deal with their own regulations. Your site has to fit into these regulations. It’s part of their job to conduct these inspections. As long as you let them do their job and not get in the way, they will let you do yours.

SUMMARY

There is a lot of risk involved with a building site. This is why inspections and insurance is so necessary. Everyone has their own job to do. It’s not just about your job or plans. There are other people involved here too. Just do your part, everyone else will do theirs.

If you do not cover yourself legally is could bankrupt you or even worse, so you need to ensure you have all the correct insurance and liabilities covered just in case the worst case happens.






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