Many people assume that work carried out on their home will be covered by some kind of insurance if anything goes wrong – whether that insurance is their own, or that of their tradesperson.
Unfortunately, as many people find out too late, home improvement works are rarely covered by any insurance policy you or your tradesperson might have. This means that if work is done poorly, or you end up out of pocket following a dispute, you won’t be protected.
This article looks at common types of insurance and how they might be relevant to your home improvement project.
Typically, buildings insurance is designed to protect you in the case of damage that you couldn’t predict or prevent, such as fires, floods and storms, a vehicle crashing into your home, and other dramatic scenarios.
It is very unlikely that your policy will cover building work and any damage that happens as a result of this work.
Although buildings insurance will typically not cover your building work, you should still contact your provider ahead of any significant work to update your existing policy. Making any changes to your home without first informing your insurance provider may invalidate your current policy or prevent you from making a claim.
While buildings insurance is designed to cover the fabric of your home in case of disaster, contents insurance is designed to cover the things in your home – everything from your carpets and curtains to your electronic gadgets and jewellery.
If you have contents insurance with accidental damage coverage, you may be able to make a claim if the tradesperson damages your covered possessions during the course of the work – for example, they knock over your TV, or irreparably stain your carpet. The tradesperson could also claim on their own public liability insurance for the damage and make it right with you.
If the tradesperson damages materials needed for the job, for example a new bathroom suite being installed, this obviously won’t be covered by your contents insurance, but the tradesperson could claim under their public liability insurance.
In most cases, it is generally most beneficial to come to an agreement with the tradesperson rather than make a claim on your contents insurance policy and risk raising your future premiums.
Public liability insurance
All tradespeople should have public liability insurance, though there are many misconceptions about what it covers.
This insurance covers accidents that cause injuries or damage to a property or a third party as a result of their work – for example, if they spilled paint on your carpet or dropped a tool while working on a roof, which hurt a passerby or damaged a parked car.
Public liability insurance is also designed to cover a business’ legal costs or compensation claims that may be made against them as a result of their work.
While it protects a business from claims where there has been an accident or injury, it does not cover poor workmanship or other disputes.
Professional indemnity insurance
Similar to public liability insurance, professional indemnity insurance is a type of insurance that is designed to cover businesses if they make a mistake in their work that causes their client a financial or reputational loss.
Companies or sole traders who might make use of professional indemnity insurance include those who provide architectural plans and structural reports.
If a building firm provided you with plans which proved to be inaccurate and led to damage to your home, they might make use of this insurance to cover their costs if you made a claim against them.
Some tradespeople offer guarantees on their work. Unfortunately however, many are worthless. A tradesperson’s own guarantee might claim to cover workmanship and materials but would only be valid if they are still trading, at best.
Ideally, any guarantee should be backed by an insurance policy which would pay out in the event that the tradesperson ceases trading for any reason.
At the very least, you should always ask for details in writing. A written guarantee might be useful if you find yourself in dispute down the line.
Manufacturer’s warranties cover specific items such as roofing materials or damp proofing products. If the product is faulty or broken they are obliged to offer a refund or replace it – though you may have to pay for the installation again, depending on the tradesperson.
If the item is installed incorrectly, it will likely void any warranties, leaving you stuck with the cost.