What Is the Difference Between Contractors’ All Risks and Public Liability Insurance?
Contractors’ all risks insures the job itself: the half-built extension, the materials stacked in the garden, the scaffold and the formwork. Public liability insures other people, meaning the injuries and damage your work causes to anyone outside your business.
One is first-party cover on your own project, the other is third-party cover on somebody else’s loss. Public liability insurance will not rebuild a gable that blew over in the night, and contractors’ all risks will not pay the neighbour whose car it landed on.
The confusion is understandable, because most contractors’ all risks policies bundle a liability section inside them. That does not make the two products the same thing.
Contractors’ all risks protects the job itself — materials, the half-built structure, scaffold and plant on site — while public liability protects everyone outside your business who gets hurt or has property damaged by your work. On a domestic extension, check whether you, the client or the main contractor is meant to arrange the works cover, because a gap here is common and expensive. Carrying both isn’t duplication; they answer completely different questions.
Compare public liability quotes before your next job starts.
- What is contractors' all risks insurance?
- What does public liability cover on the same job?
- Who owns the risk in a half-built extension?
- How do the two policies compare side by side?
- Why do these two products get confused so often?
- Which cover does your job actually need?
- What limits and exclusions should you check?
- Can you buy both together, and what does it cost?
- Frequently asked questions (FAQs)
What is contractors’ all risks insurance?
It is property cover on the works in progress. It pays to reinstate the building work, the materials and the temporary structures if they are damaged, destroyed or stolen before handover.
What sits inside the works
The permanent works are the extension, the loft conversion, the new bathroom or the steel frame. Temporary works are the scaffold, the props, the formwork and the site hoarding.
Materials count once they are on site or in transit to it, which matters on a construction project where a lorry-load of blockwork can sit in a driveway for a fortnight.
The perils it answers
Fire, flood, storm, impact, vandalism, theft and accidental damage are the usual insured perils. Overnight storm damage to an open roof is the classic claim.
A roofer who strips a slate roof on a Friday and comes back to a soaked ceiling on a Monday is looking at a works claim, not a liability one.
Plant, tools and hired-in kit
Your own hand tools are not the works, so they need a separate tools section. Owned plant and hired-in plant are usually their own sections again.
Hired-in plant deserves a proper read. Under CPA Model Conditions clause 13(b) the hirer must make good all loss or damage from whatever cause, fair wear and tear aside, from the moment the machine leaves the depot.
That is strict liability, so fault does not come into it. Clause 25 then keeps hire charges running at two-thirds of the normal rate while the claim is settled.
What does public liability cover on the same job?
It covers injury to third parties and damage to property that belongs to somebody else, along with the legal costs of defending the claim.
Injury and third-party damage
The client, the neighbour, the postman and the building inspector are all third parties. Public liability cover answers their claims, whether that is a broken wrist or a cracked conservatory.
The ABI confirms no trade is legally required to hold it. Main contractors and local authorities usually specify £5 million before you are allowed on site.
Why it stops at the edge of the works
The works under your control are not third-party property. They are the thing you are contracted to produce, so your liability policy treats them as yours.
That is the whole reason contractors’ all risks exists. Without it, a fire in a half-finished extension leaves you rebuilding it out of your own margin.
Who owns the risk in a half-built extension?
It depends on what the contract says, not on who is holding the trowel. On a domestic extension the existing house is normally the homeowner’s risk and the new works are normally yours.
New works versus the existing structure
An extension is two things at once: a new build bolted onto a building somebody already owns. Damage to the new part and damage to the old part can fall to different policies.
A plasterer who floods an existing hallway has caused third-party damage, while the same water sitting in the unfinished room next door is a works loss.
What the jct options actually decide
JCT standard forms set out three insurance options for the works. Option A has the contractor insure the new works, Option B has the employer do it, and Option C covers refurbishment where the employer insures both the existing structure and the works.
Read which option your order is written under before you price the job. Agreeing to Option A without a contractors’ all risks policy puts the whole contract value on your balance sheet.
| The situation | Who normally insures the works | What you still need |
| Domestic extension, you are the only contractor | You do, as the contractor | Contractors’ all risks plus public liability |
| Refurbishment inside an occupied house | The homeowner insures the existing structure | Public liability, plus works cover for your part |
| You are a subcontractor to a main contractor | The main contractor’s project policy usually does | Your own public liability, and check you are a named party |
| Commercial fit-out under a JCT order | Whichever option the contract selects | Read the schedule before you sign |
| Repairs and servicing with no building works | Nobody, there are no works to insure | Public liability on its own |
How do the two policies compare side by side?
The split is first-party against third-party. One puts your own unfinished work back, the other pays somebody else for what you did to them.
The comparison at a glance
The policy period row catches people out most often. Liability cover runs on an annual clock, works cover runs on a project clock.
| Contractors’ all risks | Public liability | |
| Whose property | Yours or the client’s works in progress | Somebody else’s property or person |
| What it pays for | Reinstating the works, materials and temporary structures | Compensation and legal costs to a third party |
| Typical trigger | Fire, flood, storm, theft, impact, vandalism | Injury or damage caused by your negligence |
| Policy period | Project length, or annual on a turnover basis | Annual, renewed each year |
| Sum insured basis | Contract value or estimated annual turnover | Any one claim, £1m to £10m |
| Your own tools | Not covered, tools are a separate section | Not covered at all |
| Who demands it | Contract terms, mainly on building works | Almost every client, site and trade scheme |
The same storm, two different claims
Overnight wind takes your scaffold sheeting down, and the debris that lands on the neighbour’s greenhouse is a liability claim while the rain that ruins the new floor screed is a works claim. A builder needs both policies to walk away whole.
Why do these two products get confused so often?
Because most contractors’ all risks policies are sold with a public liability section already inside them. Buying one can quietly get you both, or it can leave you with a gap you never spotted.
The bundled liability section
Trade insurers commonly package works cover, plant, materials, tools and liability into a single schedule. Others sell contractors’ all risks as pure property cover with no liability at all.
Two policies with the same product name can therefore behave completely differently. A trade package schedule is the only place the answer is written down.
How to read your own schedule
Look for the section headings and the sums insured against each one. If there is no liability limit printed, there is no liability cover.
- Contract works: a sum insured, usually the largest contract value you handle
- Public liability: a limit of indemnity, shown as any one claim
- Plant and tools: separate sums, often with single-item caps
- Employers’ liability: shown separately again once you employ anybody
Check who is actually underwriting it on the FCA Register before you rely on any of it.
Which cover does your job actually need?
Public liability is the constant, needed on every job you turn up to. Contractors’ all risks comes in when you are responsible for building works with real value sitting on site.
When public liability on its own is enough
Service, repair and maintenance work rarely creates works to insure. If you are in and out in a day and leave nothing half-finished, the exposure is liability only.
Short jobs and one-off contracts can also run on short-term public liability rather than a full annual policy.
When you need both
Anything where you are building, extending, converting or refurbishing puts value on site overnight. That is when both policies earn their keep, as the cover bricklayers need sets out for groundworks and structural work.
| Type of work | Public liability | Contractors’ all risks |
| Boiler service or a fault call-out | Yes | No works to insure |
| Rewire in an occupied house | Yes | Usually not required |
| Single-storey extension | Yes | Yes, on the new works |
| Loft conversion | Yes | Yes, the works sit open for weeks |
| Roof strip and re-cover | Yes | Yes, weather exposure is the risk |
| Subcontract labour on a main contractor’s site | Yes | Check whose project policy applies |
| Commercial fit-out over several months | Yes | Yes, and the contract will say so |
What limits and exclusions should you check?
Set the works sum insured at full reinstatement cost, not at your profit on the job. Then read the conditions attached to fire, water and unattended sites, because that is where claims fail.
Getting the sums insured right
Contractors’ all risks is usually written against your largest single contract value or your estimated annual turnover. Understate it and the insurer can reduce the settlement proportionally.
Public liability works differently, since the limit applies to any one claim rather than to the year. Public liability pricing moves far less between limits than most tradesmen expect.
Hot works and the conditions attached
Hot work permits carry hard conditions from insurers such as Allianz and HSB. A continuous fire watch runs for at least one hour after work finishes, then checks at no more than 20-minute intervals for a further hour.
Combustibles have to be cleared within 10 metres, including the floors above and below. Work should also stop at least two hours before the end of the shift.
On larger projects the Joint Code of Practice, 10th edition, applies where the original contract value is above £2.5 million. Insurers on those jobs treat it as a policy condition, not a suggestion.
The exclusions that catch trades out
Defective workmanship is excluded on both policies, so redoing your own bad work is your cost either way. HSE construction guidance is the reference point for the site conditions insurers expect you to meet.
Domestic work is inside CDM 2015 as well, and client duties pass to the contractor where there is only one. CDM guidance explains where those duties land on a small domestic job.
Can you buy both together, and what does it cost?
Yes, and most trades do. Adding contract works to an existing trade package is normally cheaper and cleaner than arranging a separate policy for every project.
Annual policy versus single contract cover
An annual tradesman insurance package covers every job you take on in the year, with the works sum insured set against your biggest contract.
Single-contract cover suits a one-off that sits well outside your normal size of work. It costs more per project but avoids reshaping the whole policy.
What moves the price
Contract value, project duration, the type of works and whether the site is occupied all move the works premium. Public liability is rated on trade, turnover and limit instead.
Money.co.uk publishes a real quote of £66.88 a month for a business on £250,000 turnover buying a full trade package with contract works. Its cheaper examples start at £6.18 a month, and typical annual spend by trade runs from £200 for decorators to £1,800 for scaffolders.
Frequently Asked Questions (FAQs)
Some policies bundle a liability section, others are pure property cover on the works. Check whether a limit of indemnity is printed on your schedule before you assume it is there.
No. The works under your control are not third-party property, so fire or storm damage to a half-built extension falls to contractors’ all risks instead.
Usually the contractor, unless the contract says otherwise. On refurbishment work inside an occupied house the homeowner normally keeps the existing structure on their own policy.
Not by the works section. Tools are a separate part of the policy with their own sum insured and often a cap on any single item.
Often not, if the main contractor’s project policy covers the works. You still need your own public liability, and you should check whether you are a named party on the project cover.
Under CPA Model Conditions clause 13(b) the hirer is liable for loss or damage from whatever cause. Clause 25 also keeps hire charges running at two-thirds of the normal rate until settlement.
No, but it is a contractual one. Main contractors, councils, social housing providers and trade schemes all treat a certificate as a condition of getting on site.
You can add the section mid-term, but cover cannot be backdated. Anything that has already gone wrong stays outside the policy.