Renovation or Extension? – Talk to Your Insurer or Broker

Most insurers will allow routine maintenance and repair work without any impact on your home and contents cover but this does not extend to extensive building or renovation works. If you are planning an extension or major renovation project it makes sense to talk to your insurer or broker to find out if there are any potentially serious restrictions on cover….

Whenever you plan building work talk to your broker or insurer because if the work involves major renovation, structural change, the addition of new buildings or reduced occupancy during works, cover can be restricted under many building and contents policies – for example all damage caused by the builder might be excluded in these circumstances if you have not contacted your insurer in advance.

While most policies will allow some works without any obligations being imposed these are usually only up to a limited value, which can vary from £25,000 to £100,000, at the more generous end of the spectrum.  Anything above the specific limits of your own policy should be disclosed direct to your insurer or broker and even if you think the work falls under the limit of your policy it is a very good idea to check what the precise stipulations are. In extreme circumstances the insurer can remove or heavily restrict all buildings and contents cover during building works if they are concerned about the nature of the build, occupancy during the alterations and site security.

Guy Everington from Castleacre Insurance Brokers comments, ‘ It may seem onerous to check how your cover may be restricted during building works but non disclosure can be extremely costly if a serious claim arises when building work is underway – particularly as this is often when your home is at its most vulnerable.’

What should you do if you are planning a building or renovation project at home?

• Find out what restrictions on cover – if any – may be imposed by the insurer. This may revolve around security or occupancy and it may be worth storing valuable and precious items elsewhere during the works.
• If your builder has their own insurance ask them directly about what they are covered for to help ascertain what gaps there may be in cover.

Does your builder have…

• Public liability cover for any damage caused due to their negligence? Does this cover extend to any subcontractors employed by them?
• Cover for the works they have carried out and are still responsible for – known as Contractor All Risks cover?
  For example if works to the value of £50,000 have been carried out and the project is only partially complete the builder needs to ensure that their own policy covers works to date.
• Cover for any loose materials on site?
  This may be kitchens, bathrooms or materials on site and not yet fixed into place.
• Employment liability for their employees?

What about additional consultants contractors?

• You should ensure that architects, project management or structural services which are supplied separately are covered by full Professional indemnity.

In addition other serious considerations for anyone considering a major building project include:

•Non-negligence insurance – if your house is close to others then allegations of cracks following your works can be brought against you. You may be found liable regardless of proof and non-negligence insurance is a way of providing protection during the works and for a 12 month period thereafter – at modest cost.

• Some contractors or project managers like to sign construction contracts, known as JCT’s (Joint Contract Tribunals) which can combine a formal agreement between you and your contractor, guidance notes and other standard construction industry documentation. The principle of an agreement between you and the contractor is a good one but problems arise when neither party addresses the insurance clauses in these contracts. It is vital if you are signing a JCT to seek advice from your broker or insurer as you can invalidate your house insurance policy if you agree to the wrong clauses.