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  • Refurbish/Develop

    Insurance during and after building work

    Hi all

    I am after some advice on how to deal with the insurance of a home renovation I have coming up. The project will be a complete refurb with a loft conversion and rear extension, so quite a big job.

    Can someone advise if I need to have any special type of insurance whilst the job is being carried out, or will my current home insurance suffice? Do I need to tell my current insurer that I am getting work done?

    The builder will have their own insurance for the duration of the project, so I imagine I will just need to ensure they are fully covered.

    The second question is quite a strange one. The builder has recommend that I get additional insurance AFTER the project is complete to act as a guarantee. The reason for this is to cover any parts or materials he has used which could be defective. This is NOT to cover any faulty installation or bad workmanship, the builder will cover that in his own guarantee.

    Does that last paragraph sound common or is that a bit strange? My architect thought it was odd so just interested to hear if anyone else has heard this.

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    'The second question is quite a strange one. The builder has recommend that I get additional insurance AFTER the project is complete to act as a guarantee. The reason for this is to cover any parts or materials he has used which could be defective. This is NOT to cover any faulty installation or bad workmanship, the builder will cover that in his own guarantee.'

    DOUBT SUCH A POLICY EXISTS AND IF IT DOES THEN THE BUILDER SHOULD TAKE IT OUT AS HE IS RESPONSIBLE FOR MATERIALS.  SOUNDS LIKE TIME TO CHOOSE A DIFFERENT BUILDER BEFORE ITS TOO LATE!

    RE FIRST QUESTION YES MAKE SURE HE HAS PROPER VALID ADEQUATE COVER AND TAKE COPIES AND CHECK RENEWAL DATES.  I THINK ITS USUAL THAT YOU ARE NAMED ON THE SCHEDULE SO YOURE INTEREST IS PROTECTED (IF THE BUILDER CAUSED A FIRE YOU WANT THE MONEY GOING TO YOU NOT THE BUILDER!).  YOUR NORMAL BUILDINGS COVER WILL LIKELY BECOME INVALID DURING THE WORKS ASSUMING THE HOUSE IS UNOCCUPIED SO BUILDER NEEDS ALL RISK INSURANCE.  IM NOT AN INSURANCE EXPERT SO OTHERS BETTER QUALIFIED TO ADVISE. 

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    THANKS JOE BLOGGS!!

    Regarding the insurance after the job, it's not a case of choosing a different builder. I am happy with him overall and he is not pushing anything onto me, it is just something he advised which I, and my architect found a bit odd.

    I wonder if is something he was perhaps a bit too honest about and mentioned it as a worst case scenario.

    For example, let's say a builder fits a shower. One of the valves had a defect in it which causes a leak and all of the builders work is now ruined. Should the builder be responsible to repair everything? The builder believes he shouldn't be responsible and this is what he is saying the insurance is for.

    However, if the hypothetical shower leak is down to him not fitting the valve properly, then he would repair everything at no extra cost.


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    'The builder believes he shouldn't be responsible and this is what he is saying the insurance is for.'

    YOUR BUILDER DONT UNDERSTAND HIS LEGAL LIABILITIES AND THAT IS A WARNING.  IF THE BUILDER INSTALLS A FAULTY PART HE IS RESPONSIBLE FOR THE DAMAGE THAT FLOWS.  ITS HIS RISK.  HE MAY HAVE A CLAIM AGAINST A THIRD PARTY, EG SUPPLIER.  ITS CERTAINLY NOT THE CLIENTS LIABILITY/ RISK.  I THINK ITS ALL EXPLAINED IN THE SALE OF GOODS AND SERVICES ACT.

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    Everything the builder supplies will likely be at cost plus his margin, his margin should cover his design risk, liability to repair if it fails and his overhead to procure it and his fixed profit on supply. Some bespoke items can fall outside this if you force something expensive / unknown on him he may want to exclude them from scope of supply. 

    Alternatively if you supply all the materials and free issue them to the builder then the quality and liability of failure is down to you ( you become the designer / specifier), you can't have the benefit of the saving without the risk, the same as he can't have the material uplift benefit without taking the risk / liability of supply.

    If you supply and it's a failure due to poor installation or deviation from the manufacturers recommendations / guidance, then you will need to argue it, prove negligence, If he supplies and fits its his problem.

    If your not extremely experienced and knowledgeable across multiple building disciplines then always take the supply and fit route or stick to what your are an expert in if its supply only.

    Sounds like he does not have a professional indemnity policy in place.

    Good luck  

     

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    Morning Adam

    The 1st point - standard home insurance may not offer you the cover you need, particularly if the property isn’t going to be occupied during the works. If you don’t speak to the insurers before the works commence, damage caused during alterations will automatically be excluded, so a renovations policy would be more appropriate and will offer wider cover for the period of the works.  Get in touch with us and we’ll be happy to help.

    the 2nd point - We think you're talking about Latent Defect cover.  It’s a bit odd, this is normally a new build thing.  Under normal circumstances, the builder would provide the guarantee for work similar to what you've mentioned.  If the builder is an NHBC member you’d get that for 2 years anyway. If you still want cover we think you can fill in an online form to get a quote with BLP insurance.

    Regards

    Heath

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    Hi all

    Ok I have spoken again with the builder and cleared up the confusion. He was simply recommending I take out a policy like this - Renovation and extension insurance.

    He will of course have his own insurance but his argument was that it may not cover me for everything, and he advised I am spending a lot of money on the works, why not take out further insurance. 

    @rdcken he does have his own insurance in his place and I will be double-checking this before any work is started. 

    @AlanBoswell Thanks for your comment, it seems you have confirmed that a renovation policy would be more suitable which is what my builder had eluded to. I will definitely be in touch when I am comparing policies IF I do decide to go down that route. Yeh I don't think I will need the Latent Defect cover, I think that just came from confusion and how my builder had worded it. 


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