You’ve found the perfect location, designed your dream home and are about to start on one of the most challenging, rewarding and costly projects of your life – building your own home.
The list of tasks to attend to is endless, obtaining planning permission, lining up contractors, arranging finance, sourcing materials and drawing up a timetable with military precision. But have you considered what might happen if accidents occur before your home is completed?
If the property is damaged under construction, not only will you suffer a serious financial loss and experience severe delays, but the whole project might be jeopardised if funds are not readily available to rebuild.
Worse still, if an accident causes injury to any Employee or member of the Public on the site, you could end up spending more time dealing with solicitors than tradesmen. There is no need to elaborate on how costly personal injury claims are at present and the effect this may have on your finances.
Insurance is something that you may not have considered, until now. It is yet another cost that needs to be included in an ever increasing budget. What you need to consider is, can I afford to build my home without it?
Self Build Insurance is the product various Insurance Companies have developed, to provide protection to individuals building their own homes in Ireland, using direct labour and individually appointed subcontractors. The levels of cover that each Insurer provides can vary substantially but should always include at least the following levels of cover.
All Risks on the home under construction
The more comprehensive policies provide cover for all accidental damages to the house under construction such as Fire , Storm, Accidental Damage, Flood, Theft of Fittings etc. There is a basic level of policy available that covers just Fire in Course of construction. While these are a minimum requirement by mortgage providers, they do not include the more frequent incidents that befall a self builder.
Plant & Equipment
Not all the materials that are to be used on the site will be fitted the day it arrives. In addition, it is not practical for tools to be loaded up and removed every night. These items need to be protected and cover is available, subject to certain limits. Insurers will not, understandably, be prepared to cover items left unsecured and a reasonable amount of security protection will be required. A basic requirement would be forcible entry/exit from a locked container or similar structure.
This cover provides you with protection for claims made against you by persons who may be injured while working on your home. In legal terms, an Employee can be defined as someone ‘under your direction or control’, so this can include any person working on the project, regardless of their individual status. As mentioned above, the legal definition of employee is not dependant on someone directly engaged on a PAYE basis. The cover provided by this section should be at a level of at least €13m per incident to cover awards for compensation as well as associated legal costs
Not everyone who visits the site is there to work on your behalf. Public Liability is there to protect you against claims made in respect of injury or damage to other people’s property. Such persons could include delivery men, planning officials, friends having a look around, nosey neighbours and even people trespassing on your site with unlawful intentions. Cover should be sought for at least €2.6m any one accident.
These are the major covers provided by comprehensive self build policies but other options would include Legal Expenses cover in case you need access to legal opinion in relation to the build and Personal Accident to provide you with compensation, should you be unfortunate enough to be injured yourself during the build.
- Contact an Insurance Broker who specialises in this type of cover and always obtain insurance quotations in writing. Cover levels vary significantly and the cheapest may exclude some of the most frequent incidents that occur on site.
- Check if a policy can be tailored to the period of time you estimate to build your home and get agreement, in advance, on the cost if you need to extend cover
- Ask for assurances on how quickly a policy can be issued. Mortgage providers will insist on seeing a ‘Letter of Indemnity’ or ‘Notice of Interest’ from your Insurance Company to release funds for your build. Specialist brokers should be able to provide this on the day cover is placed, others normally have to send paperwork to the insurance company and wait for them to issue papers. Time is money, your money
- Insurance is never a substitute for having strict health & safety practices on site. While it will relieve the financial burden of accidents, it cannot undo the delays, stress and suffering that is caused by an accident on site. Remember, this will be your home for some time to come and any incident which might affect your neighbours or local tradesmen is best avaoided.
- Being a ‘private’ builder does not absolve you from your obligations under Health & Safety legislation and information can be found on www.hsa.ie. You are as likely to receive a visit from a Health & Safety inspector as any Building Contractor
- Remember, regardless of the period of insurance stated on the policy, they usually contain conditions to the effect that cover will end when you reach practical completion. These are construction policies and not designed to include your domestic belongings. Arrange a household comprehensive policy in plenty of time before you are due to move in.
Stan Fox Dip CII
Stan is the Manager of Self Build Direct, Insurance for Self Buiders at Wright Group (Wex) Ltd. and he would be happy to answer any query or provide you with a quotation. He can be contacted at 053-9165635, email@example.com or through through their website www.selfbuilddirect.ie