Insurance for your building project

1. Insurance for building site owners

Various insurance products protect you financially against loss or damage when building a home. You can often take out such construction insurance as a package, which allows you to adapt it to your needs.

2. Contractor's all-risks insurance

Contractor's all-risks insurance is casco insurance for when you are building or renovating. It is supplementary to buildings insurance and works in progress insurance. It protects you financially if the property is damaged by unforeseen events. Contractor's all-risks insurance also covers damage caused by accidents during construction, vandalism or theft.

Banks financing the build may require you to take out this type of insurance. It is very important to read the insurance terms and conditions carefully. Sometimes the basic insurance will exclude a variety of risks such as damage to scaffolding or ancillary structures. Normally, all of the subcontractors involved in the build will cover the cost of the policy together.

3. Works in progress insurance

Buildings insurance is compulsory in various cantons, so costs are already covered in the event of fire or natural hazard damage. For this insurance to apply, your building must be officially registered with the relevant cantonal office before construction work begins. In effect, you will be taking out insurance for the work in progress.

In a canton without mandatory cantonal buildings insurance (Appenzell Innerrhoden apart from the district of Oberegg, Geneva, Ticino and Valais), works in progress insurance can be arranged with private-sector insurers, or will be included in contractor's all-risk insurance insurance.

4. Site owner's liability insurance

Site owner's liability insurance covers personal injury and property damage to third parties. And that's something that can happen very quickly on a building site. Site owner's liability insurance is not compulsory.

In some cases your building project may already be covered by your personal liability insurance . Check with your insurance company and ask for written confirmation that it will cover costs if need be.

Site owner also liable for others

Site owner's liability insurance also covers liability claims made by the tradespeople and architects you engage, as well as building company employees. Strict liability applies to you as the site owner, meaning that you are liable even if you are not personally responsible for the claim. 

5. Visitor accident insurance

If you are undertaking a major building project, you must also take out insurance to cover visitors in the event of an accident. It will assume the costs if any of those visitors is injured on your site.

6. Insurance if a building company goes under

If a contracted building company goes under while work is in progress, you may face high costs you hadn't budgeted for. There is no insurance against this. Doing these three things will protect you as effectively as possible against the consequences of your builder's insolvency :

• Check the company's credit standing, and order an extract from the debt collection records.

• Request bank and insurance guarantees. If the company goes bust the bank or insurance company will then assume the cost of the insured work.

• Do not transfer more money to the company for the next phase of the project until the previous one is complete.

7. New home warranty

A new home warranty ensures that construction defects will be fixed. New home warranty insurance will generally also cover latent defects, which are problems that are not discovered until after the building work has been formally accepted. The building company will not pay for these if it has been registered insolvent, for example.

In addition, in the purchase contract, building owners should insist on compliance with SIA standard 118. It governs the content and execution of contracts for construction work, and also contains important clarifications about complaint periods for defects under the warranty. If there are issues with the warranty, and where the provision of evidence is concerned, the provisions of the SIA (the body of standards of the Swiss Society of Engineers and Architects) are more customer-friendly than the law. 

8. Costs of insuring your new home

The costs of insuring your building project depend on the benefits you insure and the provider. Premiums are low compared with the enormous sums insured, however. 

The building costs themselves are a much bigger expense than the related insurance, and it is often necessary to increase the mortgage. You can also take this opportunity to find out if and how you can optimize your mortgage.