Construction and engineering insurance protects contractors, civil engineering firms and developers against liability, damage, delays and professional errors. Learn what cover you need, who needs it, and how to reduce claims.
Construction projects are high-stakes by default: tight programmes, multiple subcontractors, heavy plant, changing site conditions, and a long chain of responsibility from design to handover. One incident—a burst pipe, a collapse, a theft, an injury, a design error, or a dispute—can quickly turn into six-figure costs.
That’s why construction and engineering insurance isn’t “one policy”. It’s a package of covers designed to protect your people, your contract obligations, your cash flow, and your reputation.
This guide explains the key policies UK construction and civil engineering businesses typically need, how they fit together, what affects price, and how to avoid common gaps.
Construction and engineering insurance is a broad term for insurance solutions that protect businesses involved in building, civil engineering, infrastructure, mechanical and electrical works, and specialist contracting.
It usually combines:
Liability covers (to protect against claims from injury or property damage)
Project covers (to protect the works, materials, and plant)
Professional covers (to protect against design/specification errors)
People and management covers (to protect staff, directors, and legal costs)
The right mix depends on your role on the project (principal contractor, subcontractor, consultant, developer), the contract type (JCT, NEC, bespoke), and your risk profile.
If you’re involved in any of the following, you should assume you need specialist construction insurance:
Civil engineering contractors (groundworks, drainage, highways, utilities)
Building contractors (new build, refurb, fit-out)
Specialist trades (roofing, cladding, steelwork, scaffolding, M&E)
Plant hire firms (with or without operator)
Developers and property owners commissioning works
Engineers and design-and-build contractors
Consultants providing design, specification, surveying, or project management
Even if you’re a small contractor, your clients may require specific limits and policy wordings before you can start work.
If you employ staff in the UK (including labour-only subcontractors in many cases), employers’ liability is a legal requirement.
What it covers:
Injury or illness claims from employees arising from work
Legal defence costs
Typical limits:
£10 million is standard (often required by clients)
Common pitfalls:
Assuming “self-employed” means no EL exposure
Not declaring labour-only subcontractors or casual labour
Public liability covers claims from third parties (members of the public, clients, other contractors) for injury or property damage caused by your work.
What it covers:
Injury to third parties
Damage to third-party property
Legal defence costs
Typical limits:
£2 million to £10 million depending on contract requirements
Construction-specific considerations:
Depth of cover for “hot works” (welding, torch-on roofing)
Work at height and use of plant
Work on or near railways, airports, waterways, or highways
Damage to underground services
Contract works insurance protects the works in progress (the thing you are building) against sudden and unforeseen physical loss or damage.
What it can cover:
Works in progress on site
Materials on site
Materials in transit (depending on wording)
Sometimes temporary works (hoardings, scaffolding) if included
Typical triggers:
Fire, flood, storm
Vandalism
Theft (subject to security conditions)
Accidental damage
Key decisions:
Annual policy (covers multiple jobs) vs single project policy
Sum insured: maximum value of any one contract at any one time
Common gaps:
Theft conditions not met (e.g., unsecured tools/materials)
Exclusions for defective workmanship/design
Not including off-site storage or transit when needed
Plant insurance covers your owned or hired-in plant against damage, theft, and sometimes breakdown.
Examples:
Excavators, dumpers, rollers, telehandlers
Generators, compressors
Site cabins and welfare units (if included)
Why it matters:
Plant is expensive and often targeted for theft
Damage can stop a job and create delay costs
Watch-outs:
Hired-in plant: check who is responsible under the hire agreement
Overnight security requirements (tracking, immobilisers, compounds)
Professional indemnity is essential if you provide design, specification, advice, or design-and-build services.
What it covers:
Claims for negligence in professional services
Design errors, specification mistakes
Financial loss arising from professional failings
Common scenarios:
Incorrect calculations leading to remedial works
Wrong product specified causing failure or non-compliance
Inadequate surveys leading to unforeseen ground conditions
Key points:
PI is usually “claims-made” (you must keep it in place to cover future claims)
Retroactive date matters (how far back your work is covered)
Often included with public liability, products liability covers claims arising from products you supply.
In construction, this can apply when:
You supply materials or components
You manufacture or assemble items off-site
Business interruption covers loss of gross profit following an insured event (like a fire) that disrupts your operations.
For contractors, BI can be overlooked, but it’s important if you rely on:
A workshop or yard
Specialist equipment
Key contracts that depend on continuous operations
Some contracts require cover for damage to surrounding property caused by your works, even if you weren’t negligent.
This is often requested on:
Refurbishments
Works in built-up areas
Projects near existing structures
Latent defects insurance (or a structural warranty) can protect against major defects discovered after completion.
Common in:
Residential developments
Design-and-build projects
For larger projects, DSU can cover financial losses caused by delays following insured damage.
Standard PL policies often have limited pollution cover.
Consider specialist pollution cover if you work with:
Fuel storage
Contaminated land
Drainage and utilities
Chemicals, resins, or hazardous substances
Construction businesses are increasingly targeted due to:
Supplier payments and invoice fraud
Ransomware on shared project files
Data held on employees and subcontractors
Cyber insurance can help with:
Incident response and forensic support
Business interruption from cyber events
Liability and regulatory costs
Your contract can shift risk in ways that directly affect your insurance needs.
Examples:
Who is responsible for insuring the works (contractor vs employer)
Required limits for PL/EL
Requirements for non-negligent liability
Indemnities and “hold harmless” clauses
Joint names insurance requirements
A practical tip: don’t wait until the day before mobilisation. Share the contract requirements with your broker early so the policy schedule and wording match what the client expects.
Insurers price construction risks based on exposure and controls. Common rating factors include:
Turnover and wage roll
Trade and scope (groundworks, roofing, cladding, demolition, scaffolding)
Height limits and depth limits (e.g., basements)
Use of heat, bitumen, torch-on roofing
Claims history (frequency and severity)
Contract values and maximum contract works exposure
Plant values and security measures
Risk management: RAMS, training, SSIP, CHAS, ISO standards
Subcontractor management and vetting
If you’re trying to reduce premiums, focus on reducing claim frequency and proving strong controls.
Construction claims often happen in the “grey areas” between policies. Here are common gaps to watch:
Design responsibility not declared: you need PI if you design anything
Incorrect contract works sum insured: underinsurance can reduce claim payments
Hired-in plant not covered: hire agreements can make you liable for full replacement
Inadequate security for theft: insurers may apply strict conditions
Work excluded by endorsement: e.g., cladding, basements, rail work, demolition
Bona fide subcontractor clause: ensure subcontractors carry adequate insurance
Contractual liability: some indemnities go beyond standard policy cover
A subcontractor strikes an underground service, causing a local outage and repair costs. PL responds, but only if “underground services” isn’t excluded and you followed safe digging procedures.
A fire starts during hot works and damages an adjacent property. PL may respond, but insurers will scrutinise hot works permits and fire watch procedures.
A design-and-build contractor specifies an unsuitable product, requiring remedial works. PI is the key policy—contract works won’t cover defective design.
A telehandler is stolen overnight. Plant cover may respond if compound and immobiliser requirements were met.
A simple way to structure your insurance decisions:
Start with contract requirements (limits, clauses, joint names)
Map your actual activities (what you do on site, what you design, what you hire)
Identify your worst-case loss scenarios (injury, fire, collapse, major theft)
Set limits that match realistic exposures, not just the cheapest option
If you’re unsure, a broker can help stress-test your programme against your contracts.
To quote accurately (and avoid surprises at claim time), be ready with:
Trade description and typical project types
Turnover split by activity
Highest contract value and typical duration
Height/depth limits
Subcontractor use and controls
Risk assessments, method statements, and training records
Plant list and security details
Claims history (usually 3–5 years)
The more clearly you present your risk management, the more confidence underwriters have.
Employers’ liability (legal requirement if you employ)
Public liability (contract requirement for most jobs)
Contract works / contractors’ all risks
Plant & hired-in plant cover
Professional indemnity (if you design/advise)
Non-negligent liability (if required by contract)
Tools cover (if you rely on portable tools)
Business interruption (if premises/workshop is critical)
Cyber (if you handle payments, project files, or personal data)
If you’re a contractor, civil engineering firm, or specialist trade working anywhere in the UK, the right insurance should be tailored to your contracts and your real site risks.
To discuss your requirements and get a quote:
Call Insure24 on 0330 127 2333
Or request a quote online at insure24.co.uk
Public liability covers claims from third parties for injury or property damage. Contract works covers damage to the works in progress (materials and the build itself).
If you provide any design, specification, drawings, calculations, or advice—yes. Many contractors take on design responsibility without realising it.
They’re closely related. “Contractors’ all risks” often includes contract works plus plant and sometimes third-party liability, depending on the insurer and wording.
It depends on the contract. Some contracts require the employer to insure, others require the contractor. Always check the insurance clauses.
Not automatically. You may need a hired-in plant extension or a separate policy.
Commonly £10m EL and £2m–£10m PL. Some projects require higher limits, especially public sector or infrastructure work.
Most policies exclude the cost of redoing defective work itself, but may cover resulting damage. PI covers professional negligence; contract works covers sudden damage, not poor quality.
Often yes, but insurers may apply endorsements, higher excesses, or require strict controls (permits, training, fire watch).
Improve risk management documentation, reduce small claims frequency, tighten subcontractor controls, and invest in theft prevention (tracking, immobilisers, secure compounds).
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