Insurance for Renovation Projects

When insuring a property for a renovation project you could find the standard insurance market will fall short of your needs.

Firstly my advice is to arrange the Contract Works Insurance as early as possible and disclose as much information of the intended works planned. This will give clarity and full understanding between all parties including the insurances.

The Contract Works of any planned renovation project can be split between the renovator (Buildings Insurance) and the contractor (Contractors Insurance) but from my experience this can lead to gaps in cover and a pro-longed claim process. The solution is to combine these insurances and purchase a standalone ‘Contract Works Insurance policy’. Below are the key advantages to arranging this form of insurance:

  • The homeowner retains full control of the insurances and does not need to rely on the insurances of the contractor;
  • The homeowner obtains ‘all risk’ cover for the building and the works, ensuring that there are no gaps in cover. Additionally, damage caused by the contractor will be insured;
  • If there is a mortgage on the property there are requirements of subsidence and other restrictions imposed of the property, however these perils are dealt with professionally resulting in no breaches of requirements;
  • Having one insurer speeds up any claim process thus avoiding frustrating and costly arguments between insurers as to who is the responsible for the loss. The claims process is much more efficient with only one excess to pay;
  • Dealing with a specialist insurance broker like Macbeth’s who can assist with any claim situation otherwise the homeowner will need to pursue the contractors insurers directly;
  • Contractual implications – under a JCT contract (or similar) with the main contractor, there is frequently a ‘joint names’ requirement (where the contractor is noted as a joint insured). The joint names requirement is difficult to achieve in the standard property market;
  • Cost – the contractor often includes an amount within this tender for his contract works insurance so the homeowner is normally paying for the insurance without the benefit of controlling it.

At Macbeth Insurance Brokers we will arrange a standalone Contract Works Insurance policy from one of our panel of insurers to cover the property and the contract together under one policy to simplify the renovation process. After the works are complete our private client team will help arrange a bespoke policy to insure the newly refurbished home.

*Information correct as of 1st May 2016

Author: Tony Gibbs | October 7th, 2012

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Tony Gibbs
Get in touch:   Reading: 0118 916 5480   London: 020 7036 8767