Insurance is a vital element of any self build project and not something to be skimped on or ignored. You are undertaking a major job and creating a new home which you will want to protect not just during the build but after it has been completed.
If you are not adequately insured you leave yourself vulnerable to substantial financial losses and unnecessary stress. Fire, flood, subsidence, theft, vandalism and accidents are very real risks and if you are not adequately protected against such occurrences the consequences can be drastic indeed.
There is a variety of cover which you will need to consider, the principal of which is;
Public Liability Insurance
This covers legal liability for claims made by any other person or body in respect of death, injury or loss arising from your building operations, there is standard cover for either £1,000,000 or £2,000,000 in all self-build policies. Claims under this section of the policy are unusual, but when they do arise the sums involved are usually very large. In recent years they have included the death of a neighbour, injuries to visitors, claims by business's that lost power due to a self-builder inadvertently cutting an electricity cable, traffic accidents resulting from building materials stacked on the pavement and many claims from statutory authorities alleging damage to services.
Contracts Works Insurance
This is sometimes called site risks insurance, and protects against the more common losses - theft, vandalism, structural damage, fire, flood, storm damage, damage by delivery vehicles etc. etc. The new building is protected at every stage, and materials are covered as soon as ownership of them passes to the self-builder, whether on or off the site. Even more critical is the cover for storm damage. When there are freak gales there are always hundreds of claims in respect of damage to uncompleted buildings, which are particularly vulnerable until they are roofed. This involves rebuilding costs, and often damage to neighbours property caused by falling brickwork. Caravans on site, tools, and hired plant are also covered by this section of a self-builders policy.
Insurance required by others
Self-builders are often obliged to take out special cover by someone who is permitting them to do something. The most common example is when a drainage authority requires that they have five million pound of cover during the half hour that they are making a drain connection. Many of the building societies that are most generous with loans are very strict with insurance requirements and insist that their interest is written into the policy. All of this can be incorporated into a self-build policy, and often this is the only way that you can get this cover at a sensible cost.
Personal Insurance
It is also important for a self builder to consider his own life insurance, making sure that his building project will be able to proceed to completion even though he is not there to supervise it.