Before starting your home building project check your insurance

It’s important that all insurances are in place before starting home renovations or remoddelling work, and before starting construction of a new house. You don't want something to happen to your home before construction is complete, such as a fire, theft or damage from storms, only to find that you are uninsured. So it's imperative to check that existing policies won’t be adversely affected by the work.  For instance, work in existing buildings may impact the security of the facility, or expose the property to the risk of damage from the weather or from flooding. You should discuss the work with insurance providers to ensure that the policy is not made void. Additional cover may have to be purchased to cover any shortfalls. Alternatively, the insurer may require mitigating measures to be installed, such as extra security, more firefighting equipment and so on.

Who is responsible for insuring your home during construction?

​Depending on the contractual terms and conditions some insurances will be the responsibility of you and some the responsibility of the contractor. Most insurances are renewed annually so it’s good practice to have a schedule of all insurances so that action can be taken timeously before they fall due. In addition, when project conditions change, the contract value changes, or the project time-line is extended it will be necessary to advise the insurer, and in some cases additional insurance may have to be taken out. Failure to notify the insurer of changes could negate the policy.

What insurance should you consider for your home renovation project?

Insurance that needs to be considered includes:

• Insurance of the project to cover for damage and theft on the project.
• Worker’s compensation insurance purchased by the contractor to cover injury of their workers on the project. You don’t want to be paying their medical bills or have no hospital willing to treat an injured person on your project because they have no medical insurance.
• Construction equipment insurance.
• Third party liability insurance, which protects you from claims or lawsuits from third parties for damages caused by the construction work. For instance, damage to a neighbouring property or injury to a member of the public.
• Design indemnity insurance which should be provided by designers and contractors who have a design component in their contract. This protects you from additional costs incurred as a result of a design fault.

Checking your contractor's insurance

​Insurances provided by the contractor must be checked to ensure that they’re valid, that they’re of sufficient value and there aren’t clauses or conditions which are unacceptable or can’t be fulfilled.
It should be noted that insurance claims may be voided if:

• You were found to be negligent – such as failing to take suitable safety or security precautions.
• Construction equipment was operated by an individual who didn’t have the required license, someone who was intoxicated, or a person who wasn’t trained to use the item.
• Equipment was used which was obviously faulty.
• The insurance provider wasn’t provided all the details of the project, or the value or methods changed from what they were provided.
• The policy has lapsed or premiums haven’t been paid.

Check your construction insurance

​Like all insurance policies it pays to read the terms and conditions to ensure that the policy is suitable, that it will cover all the expected risks and it won’t be rendered null and void. When unsure, expert advice should be got from the insurance broker and other experts. Always get all questions answered in writing. In some instances certain events may require additional insurance, such as for flood or storm damage. 

Learn more about renovating and building houses

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​Paul Netscher has written 2 easy to read books 'An Introduction to Building and Renovating Houses - Volumes 1 and 2'. An Introduction to Building and Renovating Houses Volume 1 deals with Hiring Contractors, Managing Construction and Finishing Your Home.  and Designing your ideal home Volume 2 deals with Finding Your Ideal Property and Designing Your Dream Home. 
​("Great for those that DIY. Very helpful in home renovations!" said a Reader on Amazon.com 5*****)
These books are available from Amazon and other online bookstores in paper and ebook.
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