Buying land or a property with the intention of developing it can be an exciting investment, but there are risks to consider before construction work begins.
A development site can be vulnerable even when there are no builders working on it. Unoccupied buildings, open land, partially completed structures, building materials, and construction equipment can all create potential risks. Members of the public may also gain access to a site and suffer an injury.
For property developers, landlords, and others preparing land for construction, arranging suitable development site insurance can therefore be an important consideration from the outset.
Do You Need Insurance Before Construction Starts?
There is no single insurance policy that every development project must have before work begins. The appropriate cover will depend on the site, the proposed development, the work being carried out, and who is responsible for different aspects of the project. However, the fact that construction has not started does not mean that the site has no risks.
For example, land awaiting development may be accessible to members of the public. An existing building could suffer damage while it is empty. Materials or equipment may be stored on site before the main construction phase begins.
Development site insurance can be suitable for land that is awaiting development as well as sites where construction work is already taking place.
What Is Development Site Insurance?
Development site insurance is designed for land or property being prepared for or undergoing development work. The type of development can vary considerably. A project could involve constructing a new house, developing several residential units, converting an existing building, or carrying out another form of construction work. The level and type of cover required will depend on the circumstances.
One important consideration is public liability. A person who enters a development site and suffers an injury could potentially seek compensation from the party responsible for the site. Ashburnham Insurance’s development site insurance is designed to provide public liability protection for development sites, with available indemnity levels depending on the policy selected.
Why Can an Empty Development Site Still Be a Risk?
A development site does not need to be an active construction project to present risks. An empty plot can attract people who have no reason to be there. Children may enter a site out of curiosity, while members of the public could inadvertently access the land if boundaries and access points are not properly secured.
If there is an existing structure, the risks can be greater. A vacant building may contain damaged floors, exposed areas, or other hazards.
HSE guidance emphasises the importance of controlling access to construction sites and taking reasonable steps to prevent unauthorised people from entering. It also highlights risks to the public from hazards such as falling objects, trenches, and moving vehicles.
Insurance does not replace sensible site management, but it can form an important part of managing the financial risks associated with development land.
What Happens Once Building Work Starts?
Your insurance requirements may change when construction begins. A site that was previously empty may suddenly have contractors, subcontractors, machinery, building materials, and vehicles present. There may also be excavations, scaffolding, temporary structures, and other construction-related hazards.
This is why you should not assume that a policy arranged while land was awaiting development will automatically provide everything needed once construction starts.
Tell your insurer about significant changes to the site and the work being undertaken. The insurer may need information about the nature and scale of the project, the construction work, and the contractors involved. It is important that the insurance reflects the actual circumstances of the site.
What About Construction Equipment?
Development projects can involve equipment such as diggers, cranes, and other machinery. These items may need their own insurance arrangements depending on what they are, who owns them, and how they are being used. Construction equipment and machinery can generally be present on a site, but such equipment should have its own separate cover where appropriate.
This is an important distinction. Having development site insurance does not necessarily mean that every piece of plant, machinery, or equipment on the site is automatically insured. If you are bringing equipment onto a development site, make sure you understand where responsibility for insuring it lies.
When Should You Arrange Development Site Insurance?
It is sensible to consider insurance as soon as you take responsibility for the development site rather than waiting until construction is underway. The period between purchasing a property or plot and starting work can sometimes be overlooked. Yet the site may still be exposed to risks during this time.
If you are buying land with planning permission, waiting for planning matters to be resolved, arranging contractors, or preparing for construction, speak to an insurance provider about the appropriate cover for the site. The earlier you establish what protection is required, the less likely you are to discover that the policy does not reflect the situation when work begins.
Development Site Insurance for Property Developers
Whether you own land awaiting development or have an active construction site, suitable insurance can help protect you against the financial consequences of certain risks associated with the property.
Ashburnham Insurance provides development site insurance for land that is awaiting development or actively being developed. Public liability cover is available, with levels of indemnity ranging from £1 million to £10 million depending on the policy. If you are purchasing land, preparing a site, or starting a property development project, we can help you consider the insurance requirements for your circumstances.