Is builders’ insurance the same as home insurance?

Sometimes the naming of different types of insurance can be confusing, as can some of the jargon used. This FAQ looks at whether builders’ insurance is the same as home insurance, and what insurance you may need as a small business in the construction industry.

What is builders’ insurance?

The term builders’ insurance can be misleading. It is a general phrase that covers multiple insurance types, all designed to protect you and your business if something goes wrong.

Builders’ insurance can include:

• public liability insurance (if a client or member of the public gets injured due to something your business does, or if your business causes damage to their property)
• employers’ liability insurance (if an employee or former employee suffers injury or illness as a result of working for you)
• insurance for your tools (should they be stolen or damaged)

It’s important to check what is included in any ‘builders’ insurance’, as insurance products and terms can vary from one insurance company to another.

Who needs builders’ insurance?

Anyone who owns a small business in the construction industry can benefit from having builders’ insurance. This includes all construction companies, as well as all trades such as electricians, plumbers, bricklayers, plasterers, etc.

It doesn’t matter how your business is set up: whether you’re a small, limited company or partnership, or acting as a sole trader – insurance offers valuable protection for builders.

Why do I need builders’ insurance?

In some circumstances, it is the law. For example, if you employ anyone or have a trainee, you must have employers’ liability insurance.

It may also be a contractual requirement: many large organisations will insist you have public liability insurance before they work with you.

Things can and do go wrong. If you haven’t got insurance, the cost of paying compensation and damages when you are found to be at fault can be financially crippling.

What is home insurance?

Home insurance is for homeowners. It protects the home and the homeowner’s belongings.

It will normally cover the cost of repairs if the buildings are damaged, e.g. by way of a fire, storm or flood. It will also cover replacing contents if they're stolen or damaged.