What insurance should a builder have? A homeowner's checklist
Michael OladeleBefore you let anyone start work on your home, it is worth knowing that a properly insured builder protects you, not just themselves. If something goes wrong on site, a flood from a burst pipe, a neighbour's wall damaged, an injury to a worker, the right cover means the cost lands with an insurer rather than with you.
Why a builder's insurance matters to you
A renovation puts your home, your budget, and other people on your property all in one place. Insurance is what stands between an accident and your bank account. A builder without cover is not just a risk to their own business. They are a risk to yours, because if a claim cannot be met by an insurer, an injured party or a damaged neighbour may look to the homeowner instead.
Checking cover is not about distrust. It is a normal, sensible step, and any established builder will expect the question and answer it happily.
The insurance a good builder should carry
Public liability insurance. This is the essential one. It covers injury to other people or damage to property caused by the building work, for example a passer-by hurt by falling material or damage to a neighbour's boundary wall. For domestic projects, cover of £1 million to £5 million is common. Ask what the limit is.
Employers' liability insurance. If the builder employs anyone, including labourers or apprentices, this is a legal requirement in the UK, with cover of at least £5 million. It protects workers who are injured or made ill through the work. A sole trader with no employees may not need it, but anyone running a team must have it.
Contract works, or all-risk, insurance. This covers the project itself while it is in progress: the materials, the partially completed work, and often the tools on site, against fire, theft, flood, or accidental damage. On a larger renovation this matters, because without it a setback halfway through can become a fight over who pays to rebuild.
Professional indemnity insurance. If your builder is also doing design work, drawings, or giving professional advice, this covers mistakes in that advice. It is less relevant for straightforward building work and more important on design-and-build projects.
Guarantees and warranties to ask about
Insurance handles accidents. Guarantees handle the quality and longevity of the work itself, and they are worth asking about separately.
A workmanship guarantee is the builder's own promise to put right defects that appear after completion, often for a set period. Product and manufacturer warranties cover specific items such as boilers, windows, or roofing materials. And an insurance-backed guarantee goes one step further: if the builder ceases trading, a third party honours the guarantee, so you are not left exposed.
None of these protect the money you have already paid if the work simply stops. That is a different problem, and it is worth being clear about the difference.
How to check it in a few minutes
Ask to see the actual certificates, not just a verbal assurance. Check three things on each one: that it is current, that the cover amount is sensible for your project, and that the name on the policy matches the person or company you are hiring. If you want to be thorough, you can call the insurer named on the certificate and confirm the policy is live. A trustworthy builder will not mind.
If you are still choosing who to hire, our guide on how to find a builder you can trust walks through the full set of checks to do before the first meeting.
What protects your money, once the work begins
Insurance covers accidents and damage. It does not protect the money you hand over if a project stalls or a builder walks away mid-job. That gap is exactly where a lot of homeowner stress comes from, and it is worth closing separately from insurance.
This is where Renno helps. Instead of paying large sums up front and hoping, your renovation budget stays protected and your builder is paid for each stage only once you are happy the work is done. You keep control of your money from start to finish, alongside a builder who is properly insured. You can see how it works for homeowners here.
Frequently asked questions
Is a builder legally required to have insurance?
Public liability insurance is not a legal requirement, but employers' liability insurance is a legal requirement for any builder who employs staff. In practice, a reputable builder will carry public liability cover as standard, and its absence is a warning sign.
What insurance should I ask my builder for before they start?
At minimum, ask for public liability insurance, and employers' liability insurance if they have a team. For a larger renovation, ask whether the project is covered by contract works or all-risk insurance too.
How much public liability cover is enough?
For most domestic renovations, £1 million to £5 million is typical. The right figure depends on the scale of the work and the value of the surrounding property, so ask the builder to explain their limit.
Does my home insurance cover building work?
Not usually. Standard home insurance often excludes or limits cover during major building work, so tell your insurer before a project starts and check whether the builder's contract works policy covers the work in progress.
Is a deposit protected if the builder stops work?
Insurance does not protect a deposit or staged payments if a builder stops work. To protect the money itself, use a payment method that holds funds until each stage is completed, such as Renno.
Related guides
This article is general guidance, not legal or financial advice. Always check the specific cover on any policy before you rely on it.
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