The construction and operation of a new warehouse generally requires five different types of insurance:
1. Public Liability Insurance
Public liability insurance protects against liabilities and potential claims for damages (i.e. personal injury) to third parties (non-employees – typically customers or members of the public) and/or their property.
Generally, cover will be between £1m and £5m and the insurance will normally cover the following:
- Damage to property and possessions
- Personal injury
- Legal costs, including the claimants’ legal costs incurred by the insured if they are found to be at fault
- Consequential losses such as loss of earnings (including future loss of earnings)
2. Employers’ Liability Insurance
The Employers’ Liability (Compulsory Insurance) Act means that all firms who employ staff are legally required to hold Employers’ Liability Insurance. Employers’ Liability Insurance helps to pay any compensation if an employee is injured or becomes ill as a result of the work they do for that employer. This policy must cover at least £5million and be supplied by an authorised insurance firm, this can be checked using the Financial Conduct Authority register.
3. Contractors’ All Risk Insurance
Contractors’ All Risk Insurance is a policy protecting against physical damage to works and site materials that have been contracted to be undertaken. It will generally be issued under the joint names of a contractor and a principal client. Cover is usually provided for the construction period however it can be extended to include the defects liability period.
4. Professional Indemnity Insurance
Professional Indemnity Insurance provides protection against claims for loss or damages that may arise as a result of professional negligence or negligent advice provided by a company and/or it’s employees. It is particularly relevant where a contractor has been employed on a design and build project.
5. Structural Warranty
Structural warranties provide building owners with 10-year protection from latent defects to the structure of a building. Latent defects are defects that arise during the construction period but are not discovered until after completion). Structural warranties are normally purchased by the contractor or developer of a construction project but the warranty provides cover for the eventual purchaser of the completed building.