You know you should consider several things when hiring a home builder. A good insurance policy is among the vital requirements for a contractor. As your home is likely the most expensive asset you will ever purchase, it is essential to have adequate protection in place in case something goes wrong during the building process.
Therefore, checking the builder’s insurance policy is vital before entering an agreement with them. Ensure a contractor has an up-to-date insurance policy before signing the construction contract.
Crucial Insurance for a Home Builder
Homebuilders should have several different types of insurance policies. Here are some of them:
- Professional indemnity insurance: This type of insurance protects home builders against claims for damages from their professional work, such as faulty construction or design defects.
- Public liability insurance: This insurance covers home builders for any damage or injury caused to third parties (e.g., members of the public) due to their work. For example, if a public member sustains injuries from an accident on a building site, the home builder would be liable, and their general liability insurance would cover the costs.
- Product liability insurance: This type of insurance protects home builders against claims for damages arising from products they have supplied, installed, or used during their work. For example, if a homeowner claimed that the builder provided a faulty boiler that had caused them water damage, the builder would be protected by their product liability insurance.
It is important to note that most home building contracts require the builder to have certain types and levels of insurance in place before work can begin. So, if you are planning on hiring a home builder, check what insurance they have in place first. Please don’t hire a builder without relevant insurance.
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