Are Builders Liable for Products they Use and Install on Jobs?

Tradesmen need to be fully insured, naturally: but are the products and materials you use covered?

No. In the event that the materials or products you use did not live up to expectations, it is the supplier and manufacturer of the product that is liable.

However, this will not prevent claims from being taken against you. It’s always best to know the facts before you take out builders’ insurance, to make sure you have the best protection.

In this article, we’ll cover the following:

• When am I liable for a job gone wrong?
• What is product liability insurance?
• What is contractors’ all risks insurance?

When am I liable for a job gone wrong?

If it was your fault that the materials or products were damaged, or not installed correctly, then you are liable for the cost of repair or replacement. If the job takes longer than expected as a result, you will be expected to swallow this cost as well.

If, however, you received faulty materials or your tools aren’t working correctly on the day, your insurance may be able to help. It all depends on the kind of insurance policy you have, and if you’re covered for the risk.

At a minimum, you would need three types of liabilities included in your insurance policy to cover your basic needs:

• Public Liability
• Products Liability
• Employers’ Liability

Public liability insurance is a requirement for all tradesmen who operate in Ireland. It’s meant to protect clients, visitors and passers-by in the event that they are injured or their property is damaged and the tradesmen are responsible.

If you aren’t minimally insured with public liability cover in place, if or when an accident happens, you would find yourself having to pay out of pocket.

Employers’ liability covers risks to your subcontractors and anyone else you employ, on a temporary or permanent basis. Products liability, on the other hand, is what applies when your tools or materials aren’t up to scratch.

What is products liability insurance?

Products liability will cover you in the event of a claim relating to parts and materials you install. Bought a faulty pack of vinyl flooring? This is the policy you need if the planks are damaged or warped, and the job suffers delays as a result.

For example, one of our clients was a builder who was working on a house renovation in Dublin. When the windows were installed, the owner of the house noticed that they were scratched. Of course, they took it up with the builder, who contacted his insurance. His builders’ liability policy declined any liability, and the case was taken against the suppliers of the windows.

In the majority of cases, the insurance provider you have your policy with will pursue the manufacturers. As long as the part turns out to be defective, it wasn’t your own fault and you installed the materials correctly, the manufacturer will be liable.

What is contractors’ all risks insurance?

Contractors’ all risk insurance protects against physical damage to works and site materials that you were contracted to undertake. You should always consider getting insurance to cover any building works while they are in progress. Contract works insurance or contractors’ all risks (CAR) insurance – not to be confused with “car insurance”, just to make things more complicated! – gives you protection if your building site is flooded or destroyed by fire. Not only that, it also covers damage to materials and equipment, including hired-in equipment.

So if a contractor causes damage to a property they were hired to work on, standard public liability insurance would not provide full coverage for everything. Having a contractors’ all risks policy in place would fill the gaps and help pay to rectify the damage.

Say for example you are building a house and it burns down before you hand it back to the owner, but no one suffered an injury because it was empty. Public liability would not cover the disaster, but the cost of the build so far will come back to you thanks to your contractors’ all risks policy.

Confused about builders’ insurance? Don’t be – give us a call today, and we can help sort out the right cover for your business.