What insurance protection do property developers need?
It may be that you own a property that you wish to develop for financial gain, and that you are employing contractors or builders to carry out some or all of the work for you. While it is wise to ensure that those you employ, or sub-contractors, to do the work have their own insurance in place, it is a good idea to have your own cover in place.
Building contracts, such as JCT, can have specific insurance requirements for both employer and contractor(s) involved in a new build construction project. It is important that the right advice is sought to ensure there are no unmanaged risks left exposed.
Property development insurances should ideally be purchased as soon as you have acquired a property that you intend to renovate or develop. It provides protection from a range of potential circumstances or events that may otherwise cause financial loss or contractual exposures. We understand that every project is different and proper advice is necessary for each one to ensure you are protected.
What is included on a Property Developers insurance policy?
Building contracts and insurance policy wordings will vary. Insurance policies can be specifically tailored to your particular requirements and projects undertaken. That said, there are a number of key core covers that you would typically expect to find:
Liability Insurance for property developers
Where you have contractors, subcontractors or self-employed labourers and tradesmen working for you on site, you will need Employers Liability insurance. You will almost certainly require Public and Products Liability insurance to be in place, too, with regards to claims made by third parties for injury or property damage.
Contract Works, Plant, Equipment and Tools cover
Contract Works, or Contractors All Risks insurance, is an ‘all risks’ property insurance policy designed to cover the building being erected, as well as the materials on site and often also in transit to the site or temporarily stored offsite for the project. It is likely that this insurance may be a condition of your contract with the employer or property owners. It is often placed on a joint names basis, offering protection to both contractor and employer for physical losses to their investment.
Professional Indemnity insurance for property developers
It’s not uncommon for property developers to engage in a project on a ‘design and construct’ basis. This means the contractor is contractually responsible for the design element of the project. Generally, this means that architectural aspects of the project are the responsibility of the contractor. Professional Indemnity insurance offers insurance protection against financial losses arising from any breaches in civil liability, if the cover is placed comprehensively as it should. Design, specification and wider cover should be considered by property developers as claims are varied, complicated and can take a long time to resolve, the correct legal representation is essential.
Unfortunately, contractual, employment and other legal disputes arise regularly in construction projects. These can prove costly and time consuming to rectify. Having the appropriate legal protection in place can mitigate against costs in this situation. Insurance that extends to cover costs relating to arbitration, adjudication is beneficial to a property developer.