In our experience, clients often think “I don’t need to tell insurers about building works. What does it have to do with them?”.  However, when it comes to building works there are insurance implications. For example:

1. Is the property correctly insured during the building works?
2. Once the project is complete, will the insurer’s fire and security requirements continue to be met?
3. Will the property be correctly insured when the works are complete?

To avoid insurance getting in the way of your client’s successful project, here are the main areas they need to think about.

1. Ensuring a property is correctly insured during the building works

Insurance policies will have a building works condition written into the wording, and if a client breaks this condition, they may find themselves without any cover. In addition to the existing home insurance policy, the following should also be considered:

• The contract your client is signing with the builder
• The builder’s insurance policy
• Employee liability

We would recommend that a renovation insurance policy is secured before the work begins. This type of specialist policy can cover the existing structure, the works in progress, plus public and employee liability. These policies may also include non-negligence cover which is insurance for damage to a neighbouring property where negligence cannot be proven.

2. Meeting insurer fire and security requirements

A fire and security system should be factored into any building works at the planning stage. Several of our clients have completed a renovation only to find that the devices fitted (or not fitted) didn’t meet the insurer’s security conditions. In one instance, a newly refurbished bedroom suite had to undergo significant disruption to meet the insurer’s safety requirement. Here’s what you need to consider:

• Security alarms
• Home safes
• Fire alarms

We recommend that you speak to a specialist broker like Howden before security and fire installations commences.

3. The level of cover required at the end of the project

Post project it’s important that your client doesn’t fall into the underinsurance trap and that they review their building sum insured.  Failure to increase the building sum insured upon completion of works may result in underinsurance. It’s the homeowner’s responsibility to set the buildings sums insured and it’s important to remember that there is no direct correlation between the market value of a property and the rebuild cost.

If your client is in any doubt as to whether their buildings sums insured is too low, we recommend they obtain a professional valuation of the property. Companies such as BCH or RCA can survey a property and advise of the rebuild cost

How Howden can help

If you’re involved in a renovation and want to talk to us about the insurance your client may require, please get in touch. Providing advice is at the heart of everything we do, so we’re happy to offer clear, sensible, and independent guidance about what your client should insure and how – with no obligation.

Plus, we offer more than just insurance advice – we can introduce your client to a range of other expert service providers, from valuation companies to property managers.

Your Howden contacts