Self Build Insurance, the insurance everyone forgets about until the Mortgage providers says..... proof of insurance please?
Have No Fear. All you need to know about self build insurance is here.
You have probably been extremely busy organising the different aspects of your build and all of a sudden your mortgage provider has requested proof of insurance in order to draw down. So what is self-build insurance?
When building your home you’ll need protection in two areas, for your buildings and also public & employers liability.
Buildings: Your bank will request you to provide proof of insurance for your build under the ‘course of construction’. This is to protect your property while being built against various hazards. The general requirement is to cover for a minimum of fire only to satisfy your mortgage but this doesn’t cover for an array of potential events such as theft, storm, flood, malicious damage etc.. Unfortunately the banks only really care if something catastrophic happens and they’ll be left with potentially nothing to reclaim but they aren’t worried about possible smaller claims which could be of significant cost to you. This is why an ‘all-risks’ policy is far more superior, it will cover all perils such as fire, lightening, explosion, earthquake, storm, flood, theft and malicious damage.
Public & employers liability: This will cover you against injury, illness or death on site to a third party where it can be proven you were at fault. While public & employers liability won’t be mandatory to get you a mortgage, with the current issue of claims culture in Ireland it has certainly become essential.
Contractor Led v Direct Labour: When you hand over the build to a building contractor to complete the build right through to a ‘turnkey’ finish, you are also handing over responsibility for the site. In this circumstance, the builder will be liable for the site and should have insurance cover but it also very important that you request a copy of their insurance to ensure sufficient cover is in place. When doing a direct labour build, you are essentially the lead builder which is why you will need public & employers liability. You’ll be responsible for many tasks for the running of the site and safety of the site, both inside and outside of working hours, hence why it’s so important to cover yourself properly.
One situation though where self-builders fail to realise the need for liability cover is when they hire a builder to construct the house to a ‘builder’s finish’. In this case, the builder will leave once the house is built and sealed but with many tasks still left to be completed such as kitchen and bathroom fitting, tiling, painting and decorating. As these tradesmen will now be your responsibility, you’ll be exposed to potential accidents or injuries which could lead to a public or employers liability claim. Additionally without the proper insurance cover, you are at risk of theft of deliveries from the site and this is increasingly common.
Examples of Claims
- Gable wall blowing over in storm before Roof complete
- Electrical fire during build
- Claim for injury by labour only sub contractor
- Theft of materials on site such as Tiles, Shower Units or White goods
- Break in and theft of equipment
What do I need to know to get a self build quote:
- Size of Completed Building
- Sums Insured - not necessarily the cost of the project but the completed value
- Is it standard construction?
- Dates you require cover for - 12 months, 18 months etc
- Bank details for your indemnity letter to the bank
- Note: Building should not be more than base block level
To read more about self build insurance go to our main page here