A couple of weeks ago a story hit the national headlines where a homeowner had been left footing the bill of over £250,000, when a part of their house collapsed during a loft conversion. The family were in the home at the time and two members of the family were seriously injured.
But why is the homeowner footing the bill? Surely this would be covered under the builders insurance policy..?
The builder, a sole trader, did have an insurance policy. However when he went to claim, the insurer declared the policy invalid citing that he had 3 outstanding County Court Judgments (CCJs) that he had failed to declare, although the builder claims he was unaware of the outstanding CCJs.
So what lessons can be learnt to protect your business?
It goes to emphasise the importance of providing a fair presentation of risk, including accurate answers to all questions, and complete disclosure of material facts when entering into a contract of insurance.
Make sure the policy you are purchasing is adequate, and always approach getting policies online with a great deal of caution as it is unlikely to result in the exact cover you will require.
There really is no substitute to seeking professional advice when looking to purchase complex insurances to protect your business. For this reason we have teamed up with Astute Insurance Solutions Ltd who are familiar with our industry, the works we undertake, and will be able to ensure your policy is the right one for you.
What else could have been done?
Whilst its difficult not to have a great deal of sympathy for the homeowner when an existing building structure is undergoing structural alteration, extension or renovation, the owner should always inform their own building & contents insurer and ensure their policy covers the enhanced accidental damage risk exposure for the duration of the works.
The inclusion of this contingent cover does not alter the contractors legal responsibility for causing damage, but a correctly drafted policy will protect the property owner. In this case, from the potentially ruinous losses due to the contractors liability insurance policy failing to respond.
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