Main Contractor Insurance
A main contractor carries risk that is mostly other people's work. You hold the contract, you carry the CDM principal contractor duties, and you are the party the client sues when anything on that site goes wrong, whichever subcontractor caused it. That makes the insurance question less about your own operations and more about how the risk you have accepted contractually lines up with the cover you actually hold.
The gap that causes trouble is contractual liability. Standard public liability covers what you are liable for at common law. Sign a contract that accepts liability going beyond that, an uncapped indemnity, a fitness for purpose obligation, or liquidated damages for delay, and you have taken on exposures your policy was never written to meet. Most contractors discover this at the point somebody reads the policy back to them.
We arrange cover for main and principal contractors running multiple concurrent sites, and the work is in reconciling three documents that rarely agree: what the contract obliges you to insure, what your policy actually covers, and what your subcontractors turn out to carry.
What actually goes wrong
The exposures that produce claims in this trade, rather than a generic list.
Liability you accepted in the contract
JCT and NEC contracts allocate risk deliberately, and amended versions of both frequently push more onto the contractor. Fitness for purpose obligations are the sharpest example: they promise a result rather than reasonable skill and care, and professional indemnity policies almost always exclude them, so the obligation is real and uninsured at the same time.
A subcontractor's failure becoming your claim
You are responsible to the client for the whole of the works. If a mechanical subcontractor floods three floors of finished fit out, the client claims against you, and your ability to recover depends entirely on whether that subcontractor was adequately insured and still solvent. Recovery from a dissolved company is nothing.
Delay and consequential loss
Damage on site does not just cost the repair. It costs programme, and most contracts attach liquidated damages to late completion. Delay in start up cover exists for this, but it has to be arranged deliberately and the delay period estimated realistically.
CDM and health and safety enforcement
As principal contractor you carry duties under the Construction (Design and Management) Regulations 2015 for planning, managing and monitoring the construction phase. HSE enforcement action, fees for intervention and prosecution costs sit outside a standard liability policy unless legal expenses cover has been arranged.
Existing structures on refurbishment
Working inside an occupied or partially occupied building, the existing structure is normally insured by the employer under the relevant contract clause. When that clause is amended, or the employer's insurer refuses to note your interest, the risk quietly transfers to you without anybody deciding that it should.
The cover we arrange
Policies are put together around how you work. Employers liability is included as standard wherever you employ anyone.
Public liability with contractual liability
The base cover for third party injury and damage, extended so it responds to liability you have assumed under contract rather than only at common law. Limits of £5m and £10m are standard, and larger clients and public sector frameworks frequently specify their own minimum.
- Third party injury and property damage
- Contractual liability extension
- Limits typically £5m or £10m
- Cover for subcontractors working for you
Employers liability
Legally required and included as standard at £10m. On a main contractor risk it also needs to reflect labour only subcontractors and anybody working under your direction, which on a busy site can be a much larger population than the payroll suggests.
- Legally required, £10m limit as standard
- Covers labour only subcontractors
- Site based and office based staff
- Occupational illness and long tail claims
Contract works and existing structures
Covers the works in progress and, where the contract puts it on you, the building you are working in. Which party insures the existing structure is set by the contract's insurance option, and getting that read properly before signing is the single most useful thing a broker does on this class.
- Works in progress at full contract value
- Existing structures where required
- Temporary works and site accommodation
- Free issue materials and plant
Professional indemnity
Required on design and build, and on anything where you take on design responsibility through a subcontractor. Written on a claims made basis, so it must be maintained continuously and usually for a defined period after practical completion, commonly six or twelve years depending on the contract.
- Design and build liability
- Contractor design portion
- Maintained after practical completion
- Limit usually specified by the contract
Delay in start up
Covers the financial consequences of a contract works loss delaying completion, including liquidated damages and additional finance costs. Only meaningful if the indemnity period reflects how long a genuine rebuild would actually take, which is usually longer than the optimistic figure.
- Liquidated damages following an insured loss
- Additional financing costs
- Indemnity period matched to the programme
- Arranged alongside contract works
What an underwriter will ask
Having these to hand shortens the process considerably, and usually improves the terms.
- Turnover, split by contract type and by sector
- The largest single contract value in the last three years and the largest planned
- Number of sites running at once, and typical contract duration
- Which standard form contracts you work under, and whether they are amended
- Whether you take design responsibility, directly or through subcontractors
- Your subcontractor verification process and the minimum limits you insist on
- Split of wageroll between labour only and bona fide subcontractors
- Any work involving demolition, piling, underpinning, or existing occupied buildings
- Claims and incident history over five years, including HSE interventions
What moves the premium
Where the price actually comes from, and which parts of it you can change.
Contract values and duration
The largest contract you take matters more than the average. A firm with £4m turnover across twenty jobs is a different risk from one with £4m across two, and pricing follows the concentration rather than the total.
Which contract forms you sign
Working on unamended standard forms is materially better received than working on heavily amended ones. Being able to say which forms you use, and that amendments are reviewed, genuinely affects terms.
Subcontractor control
A documented process for collecting and checking certificates, with minimum limits that match your own, is the clearest signal of a well run contractor. It is the item most likely to move a rate that is otherwise fixed by turnover.
Design exposure
Taking design responsibility changes the risk profile and the products needed. Contractors who pass design to a designer with their own professional indemnity present differently from those absorbing it themselves.
Health and safety record
Accreditations, method statements and a clean HSE record are all taken into account, particularly on employers liability where the long tail claims are expensive and slow.
Conditions and exclusions that catch this trade out
Terms vary between insurers, so treat these as the questions to ask rather than a description of any one policy.
Fitness for purpose obligations
Professional indemnity covers negligence, meaning a failure to exercise reasonable skill and care. A contract that promises the finished works will be fit for a particular purpose creates a stricter obligation that policies exclude. Amended JCT and NEC forms introduce these more often than people expect, and the time to catch it is at review, not at claim.
Liquidated damages without delay cover
Standard contract works pays to reinstate the damage. It does not pay the damages your client levies because the job finished late. That needs delay in start up arranged specifically, and without it a modest fire can produce a much larger contractual loss than insured one.
Defective work and rectification
The cost of putting right work that was defective is not insured, only the damage that defect causes to other property. On a large fit out the distinction can run to six figures either way, which is why detailed loss records matter.
Uninsured subcontractors
Your policy protects you from the claim, but insurers reserve the right to recover from the subcontractor at fault. Where you have engaged somebody without verifying cover, some wordings restrict or exclude the indemnity entirely, and at minimum your claims record carries a loss that should have been someone else's.
Asbestos and contaminated land
Both are typically excluded and both are common on refurbishment and brownfield work. Where a survey has identified either, cover can sometimes be arranged, but it needs to be raised before work starts rather than after disturbance.
Common questions
What insurance does a main contractor need in the UK?
At minimum: employers liability, which is a legal requirement and included as standard at £10m; public liability extended to cover contractual liability, usually £5m or £10m depending on the contract; and contract works covering the works in progress. Add professional indemnity if you carry any design responsibility, and delay in start up if late completion triggers liquidated damages. The contract itself usually specifies the limits, so read that before setting them.
Who insures the existing structure on a JCT refurbishment contract?
It depends which insurance option the contract uses. Broadly, one option has the contractor insure new works, another has the employer insure the works, and a third has the employer insure both the existing structure and the works together, which is the usual arrangement for refurbishment of an existing building. Amended contracts frequently shift this, so the option in force needs checking on every job rather than assumed from the last one.
Does public liability cover contractual liability?
Not by default. A standard public liability policy covers liability you would have at common law. Contracts routinely ask you to accept more than that, through indemnity clauses that make you responsible regardless of fault. A contractual liability extension brings assumed liability within the policy, but it will not cover obligations insurers regard as uninsurable, such as fitness for purpose or liquidated damages for delay.
What are my insurance duties as principal contractor under CDM 2015?
CDM 2015 is health and safety regulation rather than insurance regulation, so it does not require particular policies. What it does is create duties for planning, managing and monitoring the construction phase, and a failure in those duties is what turns an accident into an enforceable breach. That matters for insurance in two ways: employers and public liability claims are harder to defend where duties were not discharged, and HSE costs including fees for intervention sit outside standard liability cover unless legal expenses is arranged.
How long do I need to keep professional indemnity after a project finishes?
Professional indemnity is written on a claims made basis, meaning it responds to claims made during the policy year, not to work done during it. A claim about a project completed five years ago needs a policy in force today. Design and build contracts commonly require cover to be maintained for six or twelve years after practical completion, matching the limitation period for simple contracts and for deeds. If you stop trading, run off cover continues that protection.
Am I liable if a subcontractor's insurance has lapsed?
To your client, yes. You are responsible for the whole of the works regardless of who performed which part, so the claim comes to you and your policy responds. The loss is that you have absorbed a claim that should have been recovered, which affects your own record and future pricing. This is why verifying certificates at the start of each engagement, and again if the job runs past the renewal date, is worth the administration.
Talk to somebody who knows the trade
Tell us what you actually do and we will come back to you with cover options built around it.