How long does builders’ insurance last?

Whether you’re looking around for builders’ insurance, have just paid your premium, or facing a claim against you, you’ll want and need to know how long your policy will provide protection for your business.

What types of insurance do I need?

Most builders’ insurances include:

• Public liability: covers you if your business causes injury or illness to a third party (i.e. a client or a member of the public) or damages their property.  
• Product liability: covers you for injury or damage caused by a product you make or install. 
• Employers’ liability: covers you in the event a current or former employee suffers an injury or illness while working for you. (Note: If you employ anyone, having employers’ liability cover is a legal requirement.) 
• Professional indemnity: protects you if you give negligent advice which causes financial loss. 
• Cover for the loss or damage of your tools.

Do all these types of builders’ insurance last for the same amount of time?

Most builders’ insurance policies are taken out on a 12-month basis. You then renew your insurance annually.

If, for example, your tools are stolen, you would claim under the 12-month policy in place at the time of the theft.

However, it’s possible a claim may not arise until months, years, or even decades after an insurance policy expires. An example is a situation where someone has worked with asbestos, but an illness doesn’t become apparent until many years later.

The policy in place at the time the work was done will not be in place. However, you may still be able to claim under the original policy, so long as you can prove the policy was valid at the time of the incident.

How long should I keep policy documents?

If a claim arises many years after an event, you’ll need to show you had insurance cover. However, you’ll probably want to avoid storing lots of documents over a long period.

Check with your insurer as to how long you must keep insurance documents. They may include conditions in a policy relating to how documents and records should be stored.
In some cases, a client may also require you to retain your insurance documents for a certain period, under what is referred to as the ‘limitation period’.

Some claims may not be made after a certain number of years have passed (usually six or 12, depending on the nature of the work and contract, or 15 years for latent defects). 
Most insurance companies will retain details of employers’ liability policies for up to 40 years. In any event, you should have a system for keeping insurance information, so you don’t experience difficulties if a claim arises.