Renovation insurance, structural work, extensions & major works insurance
If you are considering structural work, extensions and major works to your property then the insurance implications need to be very carefully considered prior to any holes being dug or bricks being ordered.
This type of work is frowned upon by insurers who do not look favourably on any works whatsoever taking place, let alone structural.
Firstly, the golden rule with insurance is that you must tell your insurer that this work will be taking place before you start work.
It is very likely that your current home insurance provider will do one of the following:
In respect of the second and third responses, the restriction in cover would usually be applied for the duration of the work. Practically, from the moment the first spade hits the dirt to the final coat of paint and the builders cleaning the carpets, your policy can be affected.
If you are adding an extension on the property, roof repairs or replacement, loft conversion, moving internal load bearing walls, installing new windows or Velux style windows, then the structural work is usually the first job to be completed, and it is the actual structural work that often takes the least amount of time. Once complete it is usually the internal work and the first and second fix that take up the majority of the duration of the project. This means that for a large proportion of the time you are working on your property, you will be subject to potentially harsh restrictions in cover under your insurance policy as most insurers will restrict the cover from start to finish of the works.
Bickers Insurance Services offer insurance policies for a whole variety of situations, providing cover for your property for the duration of the contract including variations in cover part way through the work as the structural work is complete and the internal / finishing work remaining.
They can offer anything from a single storey kitchen extension at the rear of a house through to major refurbishment works, additional storeys being created, loft extensions, complete property restorations, basements being dug and so on.
What should I look out for?
Most insurers offering any cover will apply certain cover conditions and restrictions on your policy. As long as you take the time to understand what these mean and what you must do to ensure you minimise your own risk, you can avoid any nasty surprises.
Forcible & violent entry
When workmen are in your property your insurers will likely apply a visible signs clause, or forcible & violent entry clause or a V&F Condition. Whatever they choose to call it, it usually is worded as follows;-
Theft, attempted theft, malicious damage to the property is excluded unless such damage is accompanied by visible signs of forcible and/or violent entry or exit to or from the premises
This clause is designed to protect the insurer from paying out a claim in either of two situations.
Firstly, if your builders or workmen fail to secure the premises properly when leaving the site and it is entered illegally as a result.
Second, if your own workmen decide to make off with your valuables whilst working on your property!
So, the best advice to avoid either of these situations, is to choose your contractors very carefully, and furthermore, ensure that you are aware of whether they will sub-contract any part of the job – if so, who are they using?
It is all too easy to lose control of who is entering your property during major works and if this could result in an increased exposure to risk, you need to make sure that you have done enough groundwork to be confident in every individual who is granted access.
Contractors insurance cover
Prior to engaging the services of any firm, you need to make sure they have adequate insurance cover in their own name. Don’t leave it to chance and don’t assume that every firm has cover because insurance can be one of the expenses a firm will cut back in the event that savings have to be made.
Typically a builder should have:
Public Liability minimum of £2,000,000 limit of indemnity*
Employers Liability £10,000,000 limit of indemnity
Contractors All Risks / Contract Works It is fairly common for this to be arranged on request for a smaller builder but larger firms should have this in place. Make sure the limits of cover are suitable for your own contract.
*With regards to Public Liability limit of indemnity, the figure of £2m is the absolute minimum you should accept. You need to ensure the level of cover is suitable. If you have a home with a £3m rebuilding cost, contents with a value of £750,000 and you are carrying out £500,000 of work to the property then you need to do the maths….
The diligent among you will also check the exclusions on the policy – does it have an exclusion for the application of heat ? Heat, for the purposes of most insurances will include burning / welding / flame cutting equipment, blow torches and hot air guns.
Remember the fire in Windsor Castle in 1992?
This fire demonstrates that although rare, fires do happen. The terrible fire in Windsor Castle took more than 1m gallons of water to put out. That’s 4,500 tonnes of water flushing through the property causing probably more damage than the fire itself!
The fire was caused by a humble £8.00 halogen lamp being used by a painting renovator which overheated, set alight to the curtains and the fire eventually cost the insurers a staggering £37m.
The conclusion for this section is to check your insurance cover and the insurance of those working for you.
The advice given here is general advice and you must seek professional advice on your own circumstances prior to acting on any information contained in these pages.