Does Builders Insurance Cover Fires on Sites?

Caeva O'Callaghan | August 14th, 2023

It’s easy to forget how many flammable materials there are present on a building site. But if your work in progress burns down, are you covered by your builders insurance?

Yes, as long as you have a contractors’ all risks (CAR) policy – and it’s a very good idea to have one – this will cover fire to a building under construction.

This includes extensions, outbuildings, conservatories, and any other building site you’re working on.

In this article, we’ll answer the following questions:

Will my contractors’ all risks policy cover fire?
There was a fire on-site and a neighbouring property was damaged, will my insurance cover it?
What can I do if my building site burns down?

Fire is a very real risk on building sites, as there can be many dry and flammable materials exposed as well as there being electrical works in progress. Read on to find out how you can minimise the risks involved, as well as make sure you have suitable cover.

Builders’ liability vs contractors’ all risks

Generally speaking, builders’ liability insurance covers your business as a builder, and contractors’ all risks (CAR) insurance – not to be confused with “car insurance”, just to make things more complicated! – covers the physical development you are constructing. These are two very different types of insurance. You may need just one, or both, depending on the job you are doing and how your business is set up.

Public liability insurance is the most important part of business insurance, and it protects against liabilities for injury to third parties (non-employees) or their property. It basically protects your clients and their visitors and loved ones against injury or damage – but it will not protect the building site itself.

For example, if you’re building an extension and accidentally put a power tool through your client’s partition wall, your public liability insurance will cover the cost of the labour and materials involved in the replacement. But if you put the power tool through the extension wall you’re building, this will fall under contractors’ all risks.

Say for example you are building a house and it burns down before you hand it back to the owner, but no one suffered injury because it was empty. Public liability would not cover the disaster, but the cost of the build so far will come back to you thanks to your contractors’’ all risks policy.

What happens if the fire spreads?

This is a worst nightmare scenario – not only has the work in progress burnt down, but the fire has spread to the client’s existing home, or a neighbouring property.

This is why you absolutely need public liability cover in place. Not only will your contractors’ all risks insurance cover the building project you were working on, but your builders’ insurance or extra public liability policy cover the other property which has been damaged or lost.

Each year there are a number of serious fires on construction sites and at buildings undergoing refurbishment. Many could be avoided by careful planning and control of safety measures.

Fire can be a particular hazard in refurbishment work on older houses when there is a lot of dry timber, as well as at the later stages of building jobs where flammable materials such as adhesives, insulating materials and soft furnishings are present.

Self-build insurance and fires

If you’re building your own home, or extending it yourself, you will need a specialist kind of insurance called self-build insurance. This kind of cover is tailored to the largest of DIY projects, including building extensions, conservatories, renovations and refurbishments, as well as full new homes and other intimidating tasks taken on by only the most confident and seasoned self-builders.

Self-build insurance can come with the following cover: