7 Hidden Insurance Risks For Builders In Ireland: Are You Fully Covered?

The construction industry in Ireland presents a high-risk working environment. While most builders know of obvious hazards such as injury or equipment damage, several critical insurance risks often go unaddressed, leaving contractors and construction firms underinsured and financially exposed. In this article, we explore both familiar and often-overlooked insurance risks for builders, helping those in the construction industry assess whether their current coverage reflects the risks they face.

 

What is construction insurance?

‘Construction insurance’ refers to a suite of insurance policies commonly arranged to safeguard construction businesses, sites, and people. A well-structured policy programme typically includes:

• Employers Liability Insurance
• Public Liability Insurance
• Contractors’ All-Risks Insurance
• Motor Fleet Insurance or Plant & Equipment Cover

 

How does it mitigate insurance risks for builders?

Comprehensive construction insurance helps protect against legal claims, property damage, worker injury, project delays, and professional liability. Each policy addresses specific risk areas, meaning builders must choose carefully to avoid gaps. An expert broker can tailor the right combination based on your work and risk profile.

 

7 insurance risks for builders that are often overlooked

 

1. Underinsuring Public Liability cover

Public liability insurance protects against third-party injury or property damage caused by your work. While most builders carry this cover, many underestimate the limit required, especially on large or public-facing projects. Insufficient limits can leave your business financially vulnerable in the event of a serious claim.

Tip: Review your project types annually to ensure your public liability limit matches the scale and nature of your work.

 

2. Inadequate Employers’ Liability cover

Employers’ liability isn’t mandatory by statute in Ireland, but it’s a practical necessity. If you employ staff or use labour-only subcontractors under your supervision, you’re likely considered their employer and could face significant legal liability if they are injured.

According to the HSA’s 2022–2023 report, construction remains one of Ireland’s most injury-prone industries.

Tip: Always disclose workforce arrangements accurately to your broker, including apprentices or temporary hires.

 

 

3. Overlooking Plant & Machinery insurance

Many builders use costly equipment daily, from excavators to dumpers. Engineering or plant insurance protects against accidental damage, theft, or breakdown of this equipment on-site or in transit. Without it, the financial and operational impact of plant downtime can be severe.

Tip: Include both owned and hired-in plant in your cover schedule. Consider overnight and off-site use, where relevant.

 

4. Gaps in Contractors’ All Risks (CAR) insurance

CAR insurance covers damage to works in progress, including temporary and permanent works, materials, and on-site assets. It may also include plant and employee tools. Gaps often arise when limits are too low or when off-site storage, transit, or subcontractor risks are omitted.

Tip: Review each project’s scope with your broker to ensure all physical assets and responsibilities are properly reflected.

 

5. Misunderstanding the role of performance bonds

Performance bonds are often misunderstood. While builders may be required to provide them, the bond protects the project owner (e.g. developer or public body) if the contractor fails to meet obligations. If you’re asked to provide one, you need insurance advice to ensure that supporting cover (e.g. PI or CAR) aligns with bond requirements.

Tip: Don’t wait until late in the tender stage; involve your broker early if bonding is likely required.

 

6. Not holding Personal Accident Insurance

Construction work carries a higher-than-average injury risk. Personal accident insurance helps protect sole traders or directors from income loss due to injury, including accidents that happen off the job. It can provide:

• Weekly benefits if you’re temporarily unable to work
• Lump sum benefits for serious injuries or disability

Tip: Tailor your personal accident cover to reflect your typical working conditions and income needs.

 

7. Omitting Professional Indemnity (PI) Insurance

If you provide or coordinate design, layout, or specification advice, you could be held liable for resulting losses, even if the design is subcontracted. PI insurance protects against claims of professional negligence, error, or omission.

Tip: Many main contractors carry PI simply because their contracts make them responsible for all design inputs, regardless of who performs the work.

 

 

Why professional guidance matters

Tailoring construction insurance isn’t just about ticking boxes, it’s about identifying exposure across your contracts, workforce, plant, and services. At ERM Financial Services, we’ve been supporting Irish builders and contractors for over 30 years with:

• Personalised risk assessments
• Market-leading policy structures
• Fast turnaround and practical support when it matters

We also support our clients through the claims process, liaising directly with insurers to help reach swift and fair outcomes.

 

Partner with ERM and build with confidence

Let us help protect your projects, people, and equipment with robust cover tailored to your trade.

For more information on the construction insurance we provide or to speak to our team directly, contact us today!