As the UK’s leading construction insurance brokers, we know the importance of getting the right builders’ insurance.  Construction is one of the most high-risk industries in the UK.  From on-site accidents to theft, project delays, and contractual disputes, the financial exposure for builders, construction firms, and developers is significant.  That’s why having the right construction insurance isn’t an option; it’s a necessity.

In this complete guide to construction insurance, we’ll cover:

• The key types of construction insurance
• What cover do you and your business need
• How to get cheaper construction insurance
• What to look for in a policy
• Frequently asked questions

We hope this guide will prove useful.  If you’d like some help or an insurance quote, then please get in touch.  You can call us on 01482 434343, request a callback, or get a construction insurance quote.

Why Construction Insurance Matters

Whether you’re a sole trader builder, a property developer or a large contractor, construction insurance protects your business against:

• Injury claims from workers or the public
• Damage to property or ongoing works
• Legal costs and compensation
• Loss or theft of tools and plant equipment
• Project delays and financial losses

Without proper cover, a single incident could put your business at serious financial risk.  Judicial College guidelines for UK building site injuries range from around £3,000 for minor ones to over £200,000 for severe, life-altering injuries.  If the worst did happen, could you afford to pay this?  

What Construction Insurance Do You Need?

We’ll create a package of builder’s insurance to suit your requirements, but most firms will need:

1. Public Liability Insurance – public liability insurance (PL insurance) is probably the most important cover a builder can have.  It covers injury to third parties, e.g. clients and members of the public, as well as accidental damage to other people’s property.  The sort of things you can claim for include:

• • Someone tripping over something while visiting your site
  • A tool falling from a scaffold and damaging a member of the public’s car
  • Accidentally damaging someone else’s property while making a delivery of materials
  • Damaging a neighbouring property during building work

2. Employers’ Liability Insurance – employers’ liability insurance (EL insurance) is a legal requirement.  If you employ staff, be they full-time, part-time, or contracted, you must have it in place under the Employers’ Liability (Compulsory Insurance) Act 1969.  If you don’t have it, you can face a fine of up to £2,500 per day.  Employers’ liability insurance covers you against:

• • Claims from employees for injuries or illnesses caused by work
  • Legal fees and compensation claims

By law, all businesses must have at least £5m of cover in place.  Given the risks involved in construction, most of our construction insurance customers have £10m (or more) of cover in place.

3. Contractors’ All Risks Insurance – contractors’ all risks insurance (C.A.R. insurance) is a comprehensive policy designed especially for construction projects.  It can cover:

• • Damage to ongoing work from things like fire, flood, or vandalism
  • Theft of materials on-site
  • Ongoing works, so partially completed buildings as well as temporary buildings such as welfare units
  • Materials while they are being moved
  • Plant and machinery – including hired tools, machinery, and owned and hired-in plant equipment
  • Third-party liability – so accidental injury to someone or damage to someone else’s property
  • Advanced loss of profit – which covers you should your project be unavoidably delayed

It will protect you financially should your site be hit by:

• • A fire, a lightning strike, an explosion, or an aircraft crash
  • A flood, earthquake or storm damage
  • Theft, vandalism, or malicious damage.
  • Construction errors or negligence – such as the wrong materials being used, sloppy workmanship

C.A.R. insurance won’t cover you for:

• • Normal wear and tear
  • Defective design or workmanship
  • War, nuclear risks, and sonic booms
  • Ongoing loss of income following a problem – often called ‘consequential loss’, if your business is interrupted because of an incident, you won’t be able to claim for any losses

4. Equipment and Hired-In Plant Insurance – construction relies heavily on expensive machinery.  From JCBs and cranes to mobile generators and cement mixers, your site will be full of plant equipment.  Owned and hired-in plant insurance can protect you from:

• • Theft
  • Accidental damage
  • Breakdown

It can even cover ongoing hire charges should the hired plant be stolen, and it also allows you to drive plant vehicles on the road.

Some Advice On Hired-in Plant Insurance

If you’re hiring plant or tools, don’t take the insurance the plant hire company offers you as:

• • It will be more expensive
  • You won’t get independent advice about what you need
  • It probably won’t give you complete public liability insurance

If you need plant insurance, contact us today.  Our team has decades of hired-in plant insurance experience and can get you the right cover for the right price.  Whether you need mini digger insurance for a day or cherry picker insurance for a month, call us on 01482 434343 or request a callback.

5. Tools Insurance – this is essential for all tradespeople and contractors.  Tools are easy to take and easy to sell.  That’s why there was a further 16% increase in tool thefts in 2025, according to the police.  Without your tools, you can’t do your job, so tool insurance is a must-have cover.  Tools insurance usually covers:

• • Theft
  • Accidental damage
  • Theft or loss of tools stored in vans or on-site
  • Hired tools, including ongoing hire charges

6. Professional Indemnity Insurance – professional indemnity insurance protects you should the advice you give cost a customer money or result in injury.  Also known as PL insurance, anyone giving professional advice should have cover in place.  If you’re in the construction industry, as a builder, developer, or the owner of a large firm, you’ll be giving advice all the time.  From materials and methods to design, if the advice you give causes problems, you can be sued.

You may think it’s not a problem you’ll face, but the number of construction PI insurance claims is rising.  Construction News reported in 2025 that, following the introduction of the Building Safety Act 2022, PI claims have risen dramatically.  Average claim values are also rising, with some reaching over £28m.  Construction professional indemnity insurance covers:

• • Negligence claims
  • Design errors
  • Incorrect advice leading to financial loss
  • Loss of documents or data
  • Mistakes made during professional work – known in the industry as ‘breach of duty or errors and omissions’.  These include structural measurement error or a missed deadline
  • Intellectual property infringements – if you’re accidentally using copyrighted materials or trademarked content in your work, you’ll be covered.  You won’t be covered if you did so deliberately

7. Contract Works Insurance – contract works insurance insures a building that’s being built, renovated, or extended, from accidental damage or loss.  It’s often included in a contractor’s all risks policy, but you can get it on its own.  It covers:

• • The structure being built
  • On-site materials
  • Labour costs required to repair or rebuild damaged buildings
  • Hired plant
  • Damage by vandalism or malicious damage

In our experience, it won’t cover faulty workmanship.

8. Personal Accident Insurance – building sites are dangerous places.  The Health & Safety Executive’s figures for 2025 show there were 35 deaths and over 50,000 injuries in construction.  Aside from the significant human cost of these incidents, the cost to the industry is huge, about £1.29bn per year.  Personal accident insurance can protect your business against claims for:

• • Loss of income
  • Loss of life
  • Injury – including the costs of health and physiotherapy needs

What Insurance Does a Construction Firm Actually Need?

We’ve mentioned a lot of policies here.  Not all building firms will need all of them.  If you don’t have employees, you won’t need employers’ liability insurance, for example.  Generally speaking, though we can say that:

Sole Traders Need:

• Public liability insurance
• Tools insurance
• Personal accident insurance
• Professional indemnity insurance
• Hired-in plant insurance

Small Contractors Need:

• Public liability insurance
• Employers’ liability insurance
• Owned and/or hired-in plant insurance
• Contractors’ all risks

Larger Firms / Developers Need:

• Contractors’ all risks insurance
• Employers’ liability insurance
• Professional indemnity insurance
• Owned and/or hired-in plant insurance
• Contract works insurance

If you’d like some personalised, independent advice, then please get in touch. Call us on 01482 434343 or request a callback, and one of our experienced team members will be happy to create a package of cover that’s right for you.

How to Save  Construction Insurance

Building site insurance can be a major cost.  There are easy ways to get cheaper construction insurance quotes, including:

1. Shop around – construction insurance quotes can vary wildly, so shop around.  Better still, get an independent insurance broker to shop around for you.  They will often have access to policies you don’t, and they’ll be able to give you advice on getting cheaper insurance without cutting cover
2. Improve Site Security – the following measures can really help:

• • Install CCTV and alarms
  • Use secure storage for tools and plant
  • Fence off sites
  • Use security patrols on large sites
  • Register owned plant with the Construction and Agricultural Equipment Security and Registration Scheme (CESAR).  It’s free and can help recover stolen kit
  • Lock material away in security boxes

3. Increase Your Policy Excess – opting for a higher voluntary excess, the amount you pay in the event of a claim, can reduce your premium by as much as 10%.  If you have a low claims record, this can be a good option
4. Maintain a Strong Claims History – fewer claims signal lower risk to insurers, helping keep costs down over time.  Think twice before making small claims.  Paying for a £300 repair to a piece of plant may seem a lot, but it may work out cheaper in the long run than higher building site insurance quotes.
5. Bundle Policies – many insurers offer discounts when combining covers, such as:

• • Public liability
  • Plant insurance
  • Contract works

6. Train Your Workforce – as they say in health and safety circles, ‘Safety is no accident’.  Invest in health and safety training and make sure your plant and machinery operators have the skills they need to work safely.
7. Work with a Specialist Broker – ALWAYS work with an independent broker who understands construction insurance.  It’s a complex area of cover and if you want the best price, you’ll need to work with someone who can consult multiple insurers.  At Coversure, we offer our construction business insurance clients:

• • Highly competitive policies
  • Cover that’s tailored to their business’s needs
  • A free review of their existing cover
  • Over 50 years of construction insurance experience
  • Access to a range of specialist insurers
  • Flexible payment terms
  • 24/7 service for motor claims
  • Personal service from a Platinum-rated feefo insurance broker

What to Look for in a Construction Insurance Policy

Not all builders’ insurance policies are created equal.  Here’s what to check:

1. Adequate Cover Limits – ensure your indemnity limits match your project size and contract requirements.  Your broker can help you with this
2. Policy Exclusions – always review what’s NOT covered.  While wear and tear, faulty workmanship, and unattended vehicle thefts are common, there are others.  Always check the small print or ask your broker to look over the policy wording
3. Excess Levels – check both compulsory and voluntary excess amounts.  You really want a flexible excess, as it will leave you in control when it comes to a claim
4. Territorial Limits – ensure cover applies across all locations you work in (UK or overseas)
5. Contract Compliance – some policies require specific insurance levels—make sure your policy meets them
6. Claims Process – look for insurers that offer fast claims handling, that have a good reputation within the construction industry, and that can offer replacement equipment fast

Common Mistakes to Avoid

As we’ve said, construction and builder’s insurance are complicated.  Get some help from an independent broker, and you can avoid common and costly mistakes such as:

• Paying too much
• Underinsuring your business as the policy limits are too low
• Not covering specific items of equipment/incidents
• Choosing the cheapest policy without checking cover levels
• Not updating your policy as your business grows
• Ignoring policy exclusions
• Failing to disclose all your business’s activities

If you’d like some personalised, independent advice, then please get in touch. Call us on 01482 434343 or request a callback.  One of our experienced team members will be happy to create a package of construction insurance that’s right for you.

Construction Insurance Frequently Asked Questions

What insurance is legally required for construction firms in the UK?
You must have employers’ liability insurance if you employ staff, as required by the Employers’ Liability (Compulsory Insurance) Act 1969.

What is public liability insurance for builders and contractors, and do I need it?
Public liability insurance covers your legal liability if your work causes injury to a member of the public or damage to third-party property (for example, damaging a client’s home or a neighbour’s car). It is not required by law but is expected by almost all commercial clients, local authorities and main contractors and protects you from potentially catastrophic claims.

Is public liability insurance mandatory?
No, but it is considered essential and is often required to win contracts.

How much public liability cover should I have? £1m, £2m, or £5m?
Typical limits for small trades and builders are £1–2 million, with £5 million (or more) usually required for work in public places, on large sites, or for local authority and commercial contracts. The right limit depends on the scale of projects, the potential for serious injury or major property damage, and what your contracts or clients specify.

What is contractors’ all risks (contract works) insurance, and what does it cover?
Contractors’ all risks (also called contract works insurance) covers the work in progress on site, including materials, partially completed structures, and often plant, tools and temporary buildings, against events such as fire, flood, storm, vandalism and theft. It is designed to pay for repairing or redoing damaged work, including labour and materials, and can be arranged by the main contractor, developer, or sometimes the client.

Do self-employed builders or sole traders need construction insurance?
A one-person contractor with no employees does not have to carry employers’ liability, but may still need public liability and, where applicable, contract works and tools cover. Many domestic and commercial clients now insist on minimum liability limits in contracts, so even sole traders are often required to show proof of cover before starting work.

Who is responsible for arranging construction insurance on a project – the client or the contractor?  Responsibility depends on the contract: on some jobs, the main contractor arranges contract works and liability cover for the site; on others, the developer or client insures the works and the existing structure, while contractors cover their own liability and plant.  Joint Contracts Tribunal (JCT) or similar contracts usually spell out which party insures which interests and on what basis, so it is vital to check the wording before work begins.

What are the most common types of claims in UK construction insurance?
Common claims include accidents causing injury to workers or members of the public, property damage (for example, escape of water or structural damage), theft of tools and plant, and equipment damage. Industry data suggests accidents and property damage make up a large share of claims, followed by theft and plant/equipment losses.

How much does construction insurance cost in the UK?
Construction and builders’ insurance quotes depend on things like:

• The size of your business
• The type of work it does
• If you have any employees
• The value of your equipment
• Your turnover
• Your claims history
• Where you are working – motorway and inner-city projects will cost more

Small firms may pay a few hundred pounds annually, while larger contractors can pay significantly more.

Does construction insurance cover faulty workmanship?
No, but resulting damage from faulty work may be covered depending on the policy.

Can I get insurance for hired plant?
Yes, hired-in plant insurance covers rented equipment against damage or theft.  It’s a specialism of ours, so if you’d like a plant insurance quote, call us on 01482 434343 or request a callback.

Do I need professional indemnity insurance as a builder?
Yes, if you provide design, advice, or consultancy services.

Are there any policy exclusions?
Yes, typical ones include gradual deterioration or wear and tear, defective design or workmanship (beyond limited resultant damage), work at unsupported depth or height above stated limits, and certain high-risk activities.  Many policies also impose conditions on site security, hot work precautions and use of heat, so breaching these can lead to reduced or declined claims.

Conclusion

Construction insurance isn’t just a box-ticking exercise; it’s a critical part of protecting your business, your people, and your projects.  The key is getting the right mix of cover tailored to your specific risks.  Cutting corners on insurance can cost far more in the long run, while a well-structured policy gives you confidence to grow your business safely.

If you’d like some personalised, independent construction insurance advice, then please get in touch.  You can call us on 01482 434343 or request a callback, and one of our experienced team members will be happy to create a package cover that’s right for you.

About The Author

Andy Price is the founder and Managing Director of Coversure Online, Coversure Hull, Coversure North Lincs and Coversure Peterborough.  Andy holds the Diploma in Insurance (Dip. CII) from the Chartered Institute of Insurance and has over twenty years of commercial insurance experience.