If I can add my two pence worth to this story, I am a director of a Wandsworth based insurance brokerage (Insurance Tailors) and one of the things we specialise in is large scale renovations/ project works insurance.
As most people are aware, basement digouts and large scale renovations in London are commonplace these days but most are insured completely incorrectly and can lead to devastating ends, like the story attached.
As part of a survey we conducted for the Sunday Times, we found that 95% of home owners are either under or total uninsured during their works. It is because they think that their household insurance will cover the existing structure and then the builder will be insured for anything else that might go wrong.
There are two significant problems here, firstly, if the works are of any significant scale (i.e. structural and over £100,000) then all household insurers will either come off cover straight away or limit cover drastically, leaving the property exposed and the home owner in breach of mortgage terms. If you simply do not tell them then you probably will be uninsured and the policy made void, which can lead to more serious implications.
By relying on the builder insuring the works, you are presuming that they have the right cover, with the appropriate insurer, have made the correct declarations about the work they do, number of employees and payments to them and are paying their premiums. Also by relying on their contract policy any claims money will go straight to them, unless you jointly named insured on their policy and I am sure if they have burnt down your house, I am not sure you will want those builders returning to fix the problem!
The correct way of insuring the property during insurance is to take out a renovations/ project works insurance that cover the existing structure and contract works on a comprehensive basis on a single policy in your name and control for the length of the works. The contractor would still need his own liability insurance and worth checking a copy of this but this way it is not only the most comprehensive way of covering the works, it is usually the only
If there are any party walls involved as part of the project, like the above, then Non Negligence party wall insurance is usually also a must, especially if you are doing a basement digout.
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