BUILDING INSURANCE AND GUARANTEES

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Any new building will need good insurance such as a warranty and guarantee for the main structure and features to sell. The insurance covers defects and repairs to major components such as foundations, roof, walls, etc. The excess is usually about £1000 so a lot of smaller jobs would not be claimed.

This insurance is not the same as normal annual buildings insurance which covers damage to the structure, but not that caused by the original build.

If you are doing the building work yourself, or working as the main contractor for a range of small builders, you will also need insurance during the build for any mishaps or claims for damage or injury from members of the public. Any building site will need proper fencing (2 metres high with security gates) and prominent warning signs, to scare off children and thieves. With proper signage and fencing then trespassers would find it difficult to sue you for accidents, although take professional advice in this area. Also pavements if blocked or damaged by holes or trip hazards need to be cordoned off and bollarded for safety.

NHBC (National House-Building Council)

NHBC is an independent, non-profit company, with no shareholders. NHBC is governed by a Council with representatives from organisations or groups who have an interest in raising standards in UK house building. They include mortgage lenders, law societies, consumer groups, architects, surveyors and house builders.

Their role is to work with the house-building and wider construction industry to provide risk management services that raise the standards of new homes, and to provide consumer protection to new home buyers in the form of a ten year guarantee for the main parts of the building.

They have a system for registering builders. This is only for large builders who do new builds, so a lot of even quite big residential builders who mainly do refurbishments etc. will not be on their register.

Approximately 18,000 builders and developers are on the Register. Around 85% of new homes in the UK are registered with NHBC each year. Around 1.6 million homeowners are covered by the NHBC Buildmark, the ten year warranty and insurance.

Zurich Building Guarantee

Zurich Insurance Building Guarantee is a relatively new product so not as well known as NHBC but it does the same warranty and guarantee, and covers more things in some instances. It also covers a longer period - twelve not ten years. It is easier to manage for a small job.

Zurich also have a registered builder scheme.

Zurich Insurance Company Building Guarantee works in partnership with Dunbar Bank.

We used Zurich Building Guarantee as it covers the same type of things as NHBC but is much easier to manage. It is also 12 years not 10. They do not inspect the building site as often, and rely more on checking the Building Regulations inspector's reports (which are the most detailed and stringent, thus avoiding duplication), and doing extensive materials and appliances checks from the office. This means that the process is painless for the small builder.

Comment

We found Zurich easier to deal with for small new builds. We advise you to check both carefully and see which suits you. They cost about the same, depending on the size and complexity of the build.

As we were an architectural company that normally did refurbishments, we had no track record in new build. We project managed the first new build, and sub-contracted out all of the jobs such as groundworks, structure, roofing, fitting out, decoration, etc. These many smaller contractors would not normally be registered with a new build insurance company, as they work on smaller jobs. The big builders have their own full time teams, which small companies do not. So the overhead of registering is too high. We found Zurich better to deal with as a small new build company as they were more approachable for inspections, scheduling, and analysis of works.

All works are primarily inspected by the Council (or private) Buildings' Inspectors, who ensure legally required safety Building Regulations are met. Any other inspection is after the fact, and will not be as thorough. Therefore as long as the Inspector is satisfied, the warranty and guarantee will follow.

For small works, builders' guarantees usually last a year. There are various schemes which look impressive but are difficult to claim against. It is better to use a local builder you can trust, try to find one by recommendation.