What Insurance Should My Builder Have?

When hiring a builder to work on your home, you’re putting your trust in their workmanship, professionalism and safety practices. But what happens if something goes wrong – like damage to your property or injury to someone on site? That’s where the right insurance matters.

Before any work begins, it’s important to check what insurance your builder has in place. This guide explains the key types of cover builders should carry, why they’re important, and how they protect both the builder and you as the client.

Do Builders Need Insurance?

Builders are not legally required to hold all types of insurance, but some cover is essential for professional and financial protection – both for them and for you.

If a builder works without proper insurance, you could be left covering the cost of property damage, accidents or unfinished work. Verifying that a builder is fully insured is one of the most important steps before signing any agreement or paying a deposit.

Main Types of Insurance Builders Should Have

Public Liability Insurance

This is the most important type of insurance for any builder. It covers injury or property damage caused to third parties during the work. For example, if a builder drops a tool and injures someone, or if work causes water damage to your neighbour’s home, public liability cover will handle the legal costs and compensation.

Make sure your builder has public liability insurance with a minimum cover of £1 million, although £2 million to £5 million is more common for larger or riskier jobs.

Employer’s Liability Insurance

If your builder employs staff, subcontractors or labourers, employer’s liability insurance is a legal requirement under the Employers' Liability (Compulsory Insurance) Act 1969. It covers the cost of claims if an employee is injured or becomes ill as a result of their work.

Even small building firms need this if they employ anyone, so ask for confirmation of the policy.

Professional Indemnity Insurance

If your builder is involved in design work or gives professional advice – for example, on structural alterations – then they should have professional indemnity cover. This protects against claims if a mistake in their advice causes you financial loss or structural issues.

This type of insurance is more common for builders who also offer design-and-build services or architectural input.

Contractors All Risk Insurance

This type of policy protects both the works in progress and tools on site. It covers damage to materials, theft of equipment, and accidental destruction of the structure during the build. It also includes public liability and employer’s liability in one comprehensive policy.

While not a legal requirement, contractors all risk insurance is widely used on larger or more complex jobs where multiple risks are present.

Other Insurance Builders May Have

Tools and Equipment Insurance

This covers the builder’s own tools and machinery against theft or damage. While this doesn't directly protect you as the client, a builder with this cover is more likely to resume work quickly if equipment is lost or stolen.

Insurance-Backed Guarantees (IBGs)

An insurance-backed guarantee gives you protection even if the builder goes out of business. If work fails within the guarantee period and the builder is no longer trading, the insurance will cover the cost of repairs or replacements.

Some schemes such as the Federation of Master Builders’ warranty or TrustMark-registered guarantees offer this extra peace of mind.

Do I Need to Check Proof of Insurance?

Yes. Always ask your builder for copies of their insurance certificates. Any professional builder should be happy to share this information. Check:

• The name on the policy matches the builder or their company

• The expiry date is valid throughout the project

• The level of cover is appropriate for the scale of work

You can also contact the insurer directly to verify the policy if you want added reassurance.

Final Thoughts

Hiring a builder without proper insurance is a risk that’s not worth taking. At a minimum, your builder should have public liability insurance. If they employ others, they legally need employer’s liability cover. For design-based projects, professional indemnity insurance is a valuable extra, and for major builds, look for contractors all risk cover.

Always check your builder’s insurance before work starts – not just for your protection, but also to ensure the project can continue smoothly in the event of unexpected problems. If in doubt, ask to see documentation, and don’t be afraid to walk away if they can’t provide it.