Contractors All Risks vs Public Liability – what’s the difference?
Published on: January 2, 2025
Published on: January 2, 2025
Whilst not being a legal requirement, most builders and construction professionals are aware of the benefits and protection that a Public Liability policy can offer them. However, it’s important to understand the cover and limitations of this type of policy to ensure that you’re not left in the lurch should the unfortunate happen.
As those in the industry know, construction projects can be filled with hazards, with the possibility for costs to spiral, not to mention the chance of contractor or sub-contractor injury. In order to safeguard your business, you should consider what would happen in the event that your Public Liability product does not cover an incident. For example, if there was damage to the works you are undertaking arising from a flood or fire, would you be in a position to repair or repeat the project? If so, what impact would that have on your business from a financial perspective? Could any financial implications cause a delay to your project scheduling and, in turn, your reputation?
The good news is that a Contractors All Risk policy can be tailored to fit your unique business requirements and offers total peace of mind. Put simply, a Contractors All Risks policy will protect you against physical loss or damage to the works under construction and any plant, tools and equipment on-site.
Hot works and welding
Working with heat is considered high risk and could result in property damage or personal injury. Unlike most Public Liability policies where this is excluded, Contractors All Risks can include hot works and welding cover and could even include legal fees and settlements where required.
Piling and excavation
Another high risk activity, piling and excavation works can not only damage surrounding foundations and buildings, but can also affect underground wiring and pipes. Your public liability policy may not cover you for this type of work, but you can rest assured that your Contractors All Risks policy would, including legal fees and damages made against you.
Damage to equipment and supplies during transit
The great thing about a Contractors All Risks policy is that it can be fully customised with as much or as little cover as you require. If you are concerned about machinery, equipment and supplies being lost or damaged in transit, opt for this to be included. This additional cover can include both inland transit or marine cargo.
Coverage for third party ‘consultant’ fees
It is possible that the investigation and repair of any property damage you have caused may require advice and consultancy from architects, engineers and surveyors, etc. Their involvement usually comes at a cost which you may not have anticipated. By including this cover in your Contractors All Risks policy, you won’t get any nasty surprises.
JCT 6.5.1 insurance
Sometimes referred to as ‘non-negligence insurance’, this additional cover can be included in your Contractors All Risks policy. JCT 6.5.1 insurance covers you in the event of a claim arising from damage to a neighbouring property (e.g. subsidence, vibration, groundwater issues, etc), where there has been no negligence during works by the contractor.
Who can take out a Contractors All Risks policy?
Insurers understand that there are often multiple parties involved in a construction project who may need to make a claim. This can include main contractors, employers, financers and suppliers who have a financial interest in the works. In most cases, it is a joint policy between the contractor and employer. It is important to advise the broker/insurer of all interested parties so they can be noted on the policy.
How much will a Contractors All Risks policy cost?
Like any insurance policy, the premium will be based on what insurers call ‘risk factors’. This may include looking at how high risk the work you do is, where abouts you operate (for example are there a higher number of tool/plant thefts in that area), the value of the project(s), etc. As always, our commercial team will take time to understand your needs and match you with the most suitable insurer on our panel and the most competitive quote we can find.
Do I really need a Contractors All Risk policy if I have liability insurance?
If you are a builder or construction professional, then yes, we highly recommend upgrading to Contractors All Risks insurance. Typical liability products simply don’t include the specific level of cover you may need and you risk leaving your business exposed if there’s a claim. What’s more, you can opt to include public liability and employer’s liability within your Contractors All Risks policy along with other add-ons that you may currently have as stand-alone policies – this makes managing and renewing your policies much easier! In addition, having a Contractors All Risks policy may be a prerequisite for a specific contract, or alternatively, having this insurance may improve your chances of getting contracts, by building trust and confidence with the client.
How do I get a quote for a Contractors All Risks policy?
In order to provide a quotation, we need to know a bit more about you and the work you do. Simply call Quote Me Today on 01227 285540 and ask for our commercial team. One of our experienced brokers will be able to advise on the right level of cover for the works you undertake and provide a free, no-obligation quotation.
