You’re a law-abiding citizen. You’re expanding your home, your office or your premises with an extension. Good choice. So far, so legal.
But is your extension insured? Before you answer in the affirmative firstly have you heard of CAR insurance? And secondly take a moment to consider the following…
Not only can adding rooms to the property impact your premiums, but any work that involves walls being taken out or moved, floors being taken up or put in, or electrics changed, will mean your insurers have to be notified about what’s going on.
Likewise, having scaffolding erected and builders holding spare keys is notifiable. If your insurer isn’t told about your plans, the original terms of your home insurance policy may not be honoured if you need to make a claim.
But now back to the really important bit …CAR insurance (which has nothing to do with cars).
If not, consider this your heads-up. You need to know about it – more than that in fact, you need to make sure your contractor has it.
CAR insurance is a non-standard insurance policy that provides coverage for property damage and third-party injury or damage claims, which are the two most common types of risk on construction projects, regardless of their size or scale.
Injuries to third parties, including subcontractors, can happen while working at the construction site. These will be covered by public and employers liability insurance, which most people are aware of. But CAR insurance offers cover for all the ongoing work. Its main purpose is to cover you if there is an unforeseen event (such as flood or fire). In such an event, CAR insurance will pay to have the work repaired or re-done, meaning you don’t end up out of pocket.
If your contractor is halfway through building your extension and it’s destroyed by fire, you will not have to pay for any of the work to be re-done. Cover may also include all materials which are stored on or immediately next to the site, as well as temporary buildings such as huts or storage areas, and their fixtures and fittings. In fact it can even cover technical drawings.
But of more importance to you as the owner of the building, often, once the building works have been completed and buildings are awaiting onward sale, it is common for contractors all risk insurance to extend cover until the property is sold or for a given number of days following completion of the work.
It is of the utmost importance that you make sure your chosen firm not only has public and employers’ liability insurance, but, crucially, has contractors all-risk insurance too – for their sake, sure, but also very much for yours.