6 December 2018

When Renovations Go Wrong. Are you adequately Insured?

By Renovation Plan

For most people, purchasing their own home is the largest investment they are likely to make and insuring this investment against unforeseen perils and losses is essential. Buildings and contents insurance is almost always arranged, however, many people do not realise that their home insurance policy could be invalid if they are carrying our building or renovation work at the property. With renovation and conversion projects on the increase, it is our responsibility to advise you of the potential shortfalls in cover.

Potential Problems with Standard home Insurance

Most standard home insurance policies have an unoccupancy clause on them which restricts the cover if the property is empty for more than 30 days. If people choose to move out of the property for the duration of the works this clause is often implemented. A few insurers may offer to continue to provide cover for the duration of the works on the existing building, but would likely exclude any claims arising as a result of the building works, and would not usually extend to cover the materials, fixtures and fittings, until they are actually fitted and forming part of the building.

Relying on the Builders policy

A contractor may have public liability insurance but this would only pick up claims in the event of their negligence. If the contractor has ‘All Risks’ cover including materials on site, this would not extend to cover materials purchased independently of the contractor. In the majority of cases we see, people have purchased their kitchens, bathrooms and other fixtures separately from the builder, leaving these items uninsured. Potentially, there could be more than one contractor on site (builders, plumbers, electricians) and it may be unclear who is responsible for what in the event of a problem.

Disaster Stories

There are many real examples of how badly things can go wrong. The most recent example I can think of is the collapse of a £1m house in South West London in April of this year. The property was undergoing basement renovations and collapsed in the middle of the night. The risk is not always just to the insured property. Building work can also result in damage being caused to neighboring properties and this should also be a consideration when discussing the nature of the works and the proximity to the adjoining properties, particularly where there is piling or basement works being undertaken or there are party wall agreements in place. Damage could be cracks appearing the neighbouring walls or in the most severe cases, the adjoining property could collapse.

We can help

Renovation Plan are delighted to have been approved as the BIBA approved scheme for specialist renovation insurance catering for both private and commercial clients. We can insure the existing structure, the contract works and public liability insurance for the project entire project and offer 6 month or 12 month policies. In respect of commercial clients or the larger projects the policy term can be suited to the contract.