Renovation & Refurbishment Insurance
Renovating a building creates a problem that does not arise on a new build: the structure already exists and is already insured, and the moment contractors arrive the existing policy may restrict or exclude certain risks once works begin.
Most property policies restrict or exclude cover once works pass a stated value, or once the building is unoccupied because of them. The works can materially change the risk profile of the building, and a site is a different risk from a house.
So two things have to be arranged and made to meet: cover for the existing structure while the work goes on, and contract works for the work itself. Where one is missing, a gap in cover can become apparent following an incident such as a fire or escape of water that damages both the new work and the building around it.
We can advise owners, landlords and developers refurbishing an existing building on how to keep the structure insured through the works, and on what to check in the contractor's own policy before they start.
Common claims and risk exposures
The exposures that produce claims in this trade, rather than a generic list.
The existing policy stepping back
Standard wordings commonly restrict cover where works exceed a stated value or where the building is unoccupied during them. The owner believes the house is insured, the insurer believes it was told nothing, and the disagreement surfaces after a loss.
Hot works
Soldering, welding, grinding, torch applied felt and heat guns are all used during refurbishment, often on old timber in a building with open voids. Fires from hot work typically start hours after the work stopped, which is why permits and fire watches matter.
Open roofs and weather
Stripping a roof or removing windows leaves the building exposed. Overnight rain into an open structure damages far more than the element being replaced, and the adequacy of temporary protection is what an insurer examines.
Empty during the works
Most refurbishments happen in empty buildings, which means the unoccupied property conditions apply at the same time: inspections, security, isolated services. Two sets of conditions apply at once, and they are easy to breach.
The contractor's own cover
Owners generally assume the contractor is insured for everything. In practice their liability policy responds where they are negligent, which does not cover accidental damage to the building where nobody was at fault, and a small contractor's limits may be well below the value of the property.
The cover we arrange
We arrange insurance around the property, its use, construction, occupancy and ownership structure. The cover available will depend on the individual risk and the terms offered by insurers.
Existing structure during works
The building itself, insured on a basis that contemplates contractors being in it. This is the cover most often missing, because the owner assumes the existing policy simply continues.
- Structure while works proceed
- Written knowing contractors are on site
- Unoccupied conditions where applicable
- Sum insured on a reinstatement basis
Contract works
The work being carried out, materials on site and works in progress, insured for the value of the project rather than of the building.
- The works and materials on site
- Works in progress
- Temporary works and scaffolding
- Professional fees where applicable
Public liability
Injury and damage to third parties arising from the works, including neighbours affected by scaffolding, debris, dust or water.
- Injury to visitors and passers by
- Damage to neighbouring property
- Limits typically £2m, £5m or £10m
- Scaffolding and access equipment
Non negligent damage to neighbours
Where works cause damage to an adjoining property without anybody being negligent, such as through vibration or withdrawal of support, ordinary liability may not respond. The JCT forms contemplate this cover specifically, and it is worth arranging where the site is attached to others.
- Damage without negligence
- Subsidence and vibration to neighbours
- Withdrawal of support
- Commonly required by JCT 6.5.1
Employers' liability where you engage labour
Where the owner engages trades directly rather than through a main contractor, the owner may be an employer for insurance purposes, and employers' liability becomes a legal requirement.
- Applies when engaging trades directly
- Labour only subcontractors count
- Legally required, £10m as standard
- Not needed under a main contract
What an underwriter will ask
Having these to hand shortens the process considerably, and usually improves the terms.
- Value of the works, and whether structural alterations are involved
- Whether the building will be occupied, partly occupied, or empty throughout
- Duration of the project and its start and completion dates
- Whether hot work will be carried out and under what controls
- Whether the roof will be opened, and the temporary weather protection planned
- Who the contractor is, their insurance limits and whether they have been verified
- Whether the building is listed, which changes methods, materials and duration
- Whether scaffolding will be erected, and its effect on security
What affects the cost of your insurance?
The main factors insurers consider when assessing the premium.
Value and nature of the works
Cosmetic refurbishment rates close to ordinary property. Structural alteration, underpinning and roof replacement move it considerably, because both the exposure and the potential for damage to the existing building rise.
Occupied or empty
An empty building under refurbishment carries both the works risk and the void risk together. Occupied refurbishment is rated differently again because there are people present, which cuts both ways.
Hot work and open roofs
The two specific activities insurers price for. Documented permit systems, fire watches and a realistic plan for weather protection all improve terms.
The contractor
An established contractor with proper limits and a clean record supports better terms than a series of individual trades engaged directly, where the owner carries more of the exposure themselves.
Conditions and exclusions to consider
Terms vary between insurers, so treat these as the questions to ask rather than a description of any one policy.
Works not notified to the existing insurer
A significant avoidable issue on this class. Where an insurer was not told about a refurbishment, cover on the existing structure may be restricted or absent at the time it is needed.
Defective workmanship
The cost of redoing work that was done badly is not insured, although resulting damage usually is. Where the contractor is at fault, recovery normally runs against their liability policy rather than the owner's property policy.
Damage from an open roof without protection
Where temporary weather protection was inadequate, water damage claims are commonly reduced or declined. Sheeting that blows off in ordinary British weather is treated as inadequate weather protection.
Hot work outside the permit conditions
Where cover is conditional on permits, extinguishers and a fire watch for a stated period after work ceases, failing to observe them is a breach at exactly the point a fire is most likely.
Common questions
Does my existing buildings policy cover the house during renovation?
Often not fully. Most wordings restrict cover once works pass a stated value or once the building is empty because of them. Tell your insurer what you are doing and get the position in writing before the work starts, because this is a common gap on this class.
The builder says they are fully insured. Is that enough?
Not usually. Their liability policy responds where they are negligent, which leaves accidental damage with nobody at fault, and their limits may be far below the value of your building. Ask for their certificate, check the limits, and arrange cover for the existing structure yourself.
What is non negligent damage cover?
Cover for damage to a neighbouring property caused by your works where nobody was negligent, such as vibration or withdrawal of support. Ordinary liability may not respond because liability depends on fault, and the JCT forms contemplate this cover specifically for that reason. It matters most on terraced and semi detached sites.
We are living in the house while the work happens. Does that help?
It removes the unoccupancy problem but adds others: people, dust and contractors in a home, and possessions on site during the work. Tell the insurer either way, because the basis of cover differs between an occupied and an empty refurbishment.
How do I get a quote from True Risk Solutions?
Call 01304 262880 and speak to a broker, or email info@truerisksolutions.co.uk with what you do, what you need cover for and a phone number with the best time to call, and a broker will call you back. We need a phone number to quote, because the cover and the price depend on questions that are quicker to answer on a call than by email.
Speak to a specialist who understands your industry
Tell us about your business and the work you undertake, and we will come back to you with cover options built around it. Call 01304 262880, or email us with a phone number and the best time to call and a broker will ring you back.