What Insurance Do I Need as a Building Contractor?

Why Do Building Contractors Need Insurance?

As a contractor, you’re juggling multiple trades, subbies, materials, deadlines — and a fair bit of risk. Even the best-run sites can face unexpected events: a client trips on a loose slab, a skip rolls into a parked car, or a leak appears after a job’s signed off.

Insurance protects your business, your team, your clients, and your bottom line from the fallout. It also reassures clients (especially commercial ones) that you’re serious, safe, and trustworthy.

And if you’re working under contract, many clients or principal contractors will require specific types of insurance before you can step foot on site.

Essential Insurance for Building Contractors

1. Public Liability Insurance

Why you need it: This covers you if someone is injured or their property is damaged because of your work.

Typical scenario: A member of the public trips over your extension materials on a shared driveway and sues for injury. Public liability covers the compensation and legal costs.

Limit suggestion: £1M – £10M depending on the size and scope of your projects.

At ABA Insurance, we recommend at least £5 million for most contractors working on residential or commercial projects.

2. Employers’ Liability Insurance (Legal Requirement)

Why you need it: If you employ anyone (even labourers or apprentices on a casual basis), you’re legally required to have employers’ liability insurance.

Covers: Injuries or illness your staff suffer as a result of working for you.

Penalties for not having it: Up to £2,500 per day in fines.

Top tip: Don’t forget this still applies even if you pay subbies through CIS — if you’re supervising or controlling their work, they might count as employees in the eyes of the law.

3. Contractors’ All Risks (CAR) Insurance

Why you need it: This covers the contract works — the actual building you’re working on — against fire, flood, theft, and other risks while the job is in progress.

Also covers: Tools, plant (owned or hired), and temporary buildings like site huts or scaffold.

Real-life example: A half-built extension is damaged by a storm before sign-off. With CAR insurance, you’re covered for the cost to re-do the work.

We see this as a must-have for main contractors managing full build jobs, especially where materials are stored on site overnight.

4. Tools and Equipment Insurance

Why you need it: Power tools, hand tools, and site equipment don’t come cheap — and theft from vans or sites is one of the most common insurance claims in the trade.

Covers: Theft, loss, or damage — often including overnight cover from vans if specified.

Top tip: Always check if your policy includes “overnight theft from unattended vehicles,” especially if you leave kit in the van.

5. Professional Indemnity Insurance (If You Offer Advice or Design)

Why you might need it: If you offer any advice, drawings, or specifications as part of your service, you could be held liable if they result in a problem — even years later.

Example: A contractor provides layout advice for steelwork, which later fails due to miscalculation. Professional indemnity can cover legal defence and compensation.

Often required for: Design & build contracts or work involving structural elements.

6. Personal Accident & Income Protection

Why you need it: If you’re self-employed and suffer an accident that puts you out of action, you could lose weeks or even months of income.

What it covers: Lost earnings due to accident or injury — helps pay the bills while you recover.

It’s not just about protecting others. If you’re the main breadwinner or sole trader, your business is you. Don’t leave yourself uncovered.

Optional but Valuable Insurance Cover For Building Contractors

• Legal Expenses Insurance – Covers the cost of legal advice or representation for disputes, contract issues, tax investigations and more.

• Van Insurance (Business Use) – Don’t forget, standard cover won’t cut it if you’re carrying tools and materials.

• Public Indemnity Bonds – Sometimes required for larger commercial contracts or public sector tenders.

Get the Right Insurance Cover with ABA Insurance

At ABA Insurance, we understand that no two contractors are the same. Whether you’re laying bricks, managing sites, or running multiple teams, we tailor cover to your business — no off-the-shelf nonsense.

Competitive premiums
Flexible monthly payments
Quick turnaround on quotes
Support from specialists who know the trade

Need a quote or want to review your current policy?
Call us on 01474 833 322 or get a fast online quote at: www.abainsurance.co.uk/trades-insurance-quote/