What insurance should my builder have?

While builder insurance needs can vary from one builder to another, there are some basic coverages to look for when hiring a builder. To confirm they have a valid policy in place, ask to see their certificate of insurance. If they have one, they'll have no problem showing it to you.

Public Liability Insurance

Public Liability insurance covers situations where a builder causes injury or damages to the general public, which includes their clients, other businesses on-site etc, the public etc. Public Liability covers compensation or medical expenses the court awards, and any legal costs the builder incurs in the process.

Public Liability (PL) isn’t required by law, but most builders wouldn't work without it. All clients should insist a builder holds a valid policy. Businesses, public sector organisations and higher-end clients may be more accustomed to insisting on PL cover and seeing proof, but really all clients can and should ensure their builder is covered.

Public Liability Examples:

• A contractor for another business falls over an exposed wire, is unable to work due to injury and sues the builder for their lost income.
• Your builder accidentally drops your hammer onto an expensive tile floor and damages it.

Employers’ Liability Insurance

Employers' Liability insurance is compulsory for any business that hires employees, irrespective of their role in the business, how they're paid (e.g., cash) or their tenure (e.g., temporary, short-term workers). With that in mind, your builder will be legally required to hold Employers’ Liability.

Employers' Liability covers a business if an employee is injured or falls ill due to their work. According to the latest 2024/25 HSE statistics, construction remains one of the UK’s most dangerous sectors, with 35 fatal injuries recorded in the latest year—a rate 4.8 times higher than the all-industry average. Furthermore, approximately 50,000 construction workers sustained non-fatal injuries, with 33% of those caused by falls from height. The risks are very high.

This cover is a legal requirement; failing to hold a valid policy can result in a fine of up to £2,500 for every single day you are uninsured, plus a £1,000 fine for failing to display your insurance certificate.

• Employers Liability Example: A construction worker is seriously injured while building a tall brick wall.

Tools & Equipment Insurance

Tools Insurance protects the essential equipment a builder needs to complete your project. In the current 2026 economic climate, this cover is more critical than ever; since 2021, high inflation and supply chain pressures have driven the cost of professional power tools and specialist machinery up by nearly 20%. If a builder’s tools are stolen or damaged and they lack insurance, the sheer cost of out-of-pocket replacement in 2026 means they are at a much higher risk of abandoning the job or facing indefinite delays. Ensuring your builder has dedicated tool and hired-in plant cover is a vital safeguard for your project's timeline.

• Tools Insurance Example: Thieves break into your building site at night at steal the saws, drills and other tools needed to finish the fitted wardrobes in your new house. New equipment is urgently needed to finish the work on schedule. Your builder's tools coverage pays for replacement of this valuable equipment.

Professional Indemnity Insurance

Professional Indemnity insurance may be needed for a builder who is involved with the designs or giving professional advice or service. If your builder is simply executing on drawings given to them by an architect, for example, they may not need this cover.

• Professional Indemnity Example: Your builder designs and constructs a conservatory for you, but it leaks due to a faulty design. You sue your builder for the cost of repairing the damage and making the conservatory watertight.

Contract Works Insurance

Contract Works insurance protects on-site work, materials, and temporary structures from damage, loss, or theft. This cover has become indispensable in 2026 following a surge in extreme weather events; for example, UK insurers recently paid out over £560 million for damages caused by storms Babet, Ciaran, and Debi alone. With severe storms and flash flooding now occurring more frequently, Contract Works insurance is the only way to protect expensive raw materials and half-finished structures from being destroyed by nature before the project is handed over. It is now a standard requirement for most well-managed residential and commercial builds.

Building guarantees and warranties

A warranty can cover the client if there are faults in the finished product due to poor workmanship or other issues. Warranties typically only last for a certain period of time, so be sure to note that fine print.

Building guarantees (backed by insurance) can protect a client if the building company goes bankrupt. That way, paid sums can be covered and used to fund the continuation of work with another builder.