"The contractor has insurance" – this sentence is the weakest link in a principal's risk management. The mere existence of the paper says nothing about whether the cover actually protects the project: it might relate to different activities, a lower sum, and it might expire halfway through the job. This article shows what's actually worth checking, with explanations; the tick-box version lives on the checklist page.
- Don't just ask for a certificate – ask for substance: what the cover applies to, how much, and for how long.
- The five main points: type of cover, sum insured, liability limit, period of cover, and insured circle.
- The sixth: whether your existing building is included (existing property extension).
- Cover is a live question during the project too: it needs updating on any extension or change.
The five main checkpoints
1. Type: is it genuinely CAR/EAR (protecting the works under construction), or only contractor's liability insurance (covering only damage caused to others) – the difference here. 2. Sum insured: does it reach the project's full value – under-insurance will proportion down your own claim too: the sum insured article. 3. Liability limit: is it proportionate to the surroundings (neighbours, traffic). 4. Period of cover: does it run for the whole programme, and what happens if it slips. 5. Insured circle: does it extend to the whole subcontractor chain – and to you, as the principal.
The sixth point: your own property
If the work is being carried out on an existing building – an extension, a renovation, an operating property – the most important question is: is there an existing property extension, and for how much? Without it, your building is largely invisible as far as the contractor's policy is concerned. A condition survey belongs here too: ask for one to be carried out before work starts – it's in both parties' interest.
How should you ask for it?
In practice, a copy of the policy or a substantive certificate of insurance issued by the insurer is the right form – a one-line statement that cover "is in place" isn't enough. The legal basis for asking comes from the construction contract's insurance clause: if it fixes what has to be certified and in what form, the request isn't a favour, it's performance of the contract. Details of the certificate itself: issuing the certificate.
During the project: an ongoing check
Cover isn't a snapshot taken at the start. On any extension, additional works or increase in value, the policy has to keep up with reality (the amendment article) – as a principal, it's worth handling this together with programme changes: a new completion date means an updated certificate. If at any point you're unsure what you're looking at on paper, just ask – the consultation is free of charge.
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