Site Insurance, Structural Warranty & Legal Expenses
When getting your Self Build project underway, it’s not quite as simple as hiring your team and turning up on site. It’s really important that you have all the necessary insurances in place for your site and designs, in order to protect yourself, your team, and your new home from any difficulties.
So, what cover is required, and when should these be arranged?
This week, our expert advice comes from Simon Middleton of Protek Self Build Insurance, who sheds light on the different insurances and warranties needed before your Self Build project can commence:
Generally speaking, a Self Builder should consider arranging site insurance, structural warranty and legal expenses when embarking on a project. It’s really important to bear in mind that every project is slightly different, which is why discussing your project with an expert is so important.
The site insurance usually needs to be in place from the exchange of contracts. If the plot is part of your garden, then arrange it when you split the deeds, or as works are about to start.
Site Insurance needs to run for the duration of the project and covers all works in progress, materials, plant tools and equipment – as well as any residential caravans and the contents therein. It will also include cover for public liability and employers liability and often personal possessions and personal accident.
The policy is based on the professional reinstatement cost of the new works element, and must be enough to cover the total rebuild upon completion. Where the project involves an existing structure that’s being converted, the rebuild cost for the retained element will also need to be included in the site insurance policy.
Without site insurance in place, a Self Builder is unlikely to financially recover sufficiently to be in a position to rebuild a project destroyed by a serious loss, like a fire.
A structural Warranty covers defects in the design, workmanship, materials and components of the housing unit and protects the homeowner in the event the property suffers physical damage, or the risk of physical damage. It runs for 10 years from the date of completion, but has to be arranged well before the works on site commence.
This is because the warranty provider’s technical auditor has to carry out a design check before inspecting the works during the course of construction. A typical Protek Warranty, for example, can be provided to include the building control.
This reduces the number of inspectors on site, making it an efficient proposition. A structural warranty protects the future homeowner against risks that are simply not covered elsewhere and will be a requirement of most lenders.
Legal Expenses, often referred to as professional fees insurance, is an often overlooked element of cover and provides protection for disputes with contractors, professionals and suppliers that arise during the course of the project.
A legal helpline provides assistance in the event of a dispute occurring, and the service is backed by the legal cover, so where there is a good prospect of success the legal team will pursue the dispute.
It is important to bear in mind that a contract must be evidenced in writing and without one, you will have no protection – which is why the use of contracts is so important.
Party Wall Liability
If you are proposing to carry out work within 3 or 6 metres of a party or boundary wall, you will invariably have to consider your liability under the Party Wall Act 1996.
Under the terms of the Act, your neighbour has a right to be compensated for any loss or damage caused by your relevant works.
So, should you cause damage to the neighbouring property inadvertently, public liability does not provide protection as it is a foreseeable loss.
However, cover for your contractual liability can be included under Site Insurance as an option on any project where you have evidence of a party wall agreement in place.
We’d like to thank Simon and Protek for their time and contribution to this week’s blog! If you would like any help, or more information regarding Site Insurance, Party Wall Liability, Structural Warranties, or Legal expenses, get in touch with Protek Self Build Insurance via their website!