With the house-building industry announcing it is to make thousands of construction workers redundant, many may make the decision to set up in business and offer their services direct to local homeowners.

Thousands of construction workers are expected to be laid off, following news that Charles Church, Persimmon Homes and Westbury Partnerships have collectively made 1,000 redundancies, which follows news that nearly 2,000 job are to be cut by rival firms Taylor Wimpey and Barratt Developments.

The cuts, caused by the fall in new house sales, takes the total job losses in the house-building sector since the start of the year to 5,150, with more predicted.

However, it could be a case of ‘buyer beware’ and Belmont International, Kent’s largest independent insurance broker, has urged homeowners to check that their prospective contractors are properly insured before appointing them and letting them get to work.

Barrie Etchells of Belmont International, said: “With the economy tightening, homeowners may go in search of a bargain price and think they have struck lucky with a cheap deal. However, it’s vital that the homeowner ensures that they, and importantly their contractors, have the necessary insurance cover, including Public Liability and Contract works insurance, before agreeing to start work.

“Even where your main contractor is employed by you and has provided evidence of insurance it is still prudent for you to buy your own insurance policy to protect your interests should your main contractor’s insurance provider fail to respond or provide you with adequate protection if a loss occurs.

“Without insurance, homeowners may be left liable for any problems resulting during the build and may be forced to look for recourse through the courts which can be expensive, stressful and time consuming.”

Contractors who employ people must, by law, have Employers’ Liability Insurance which covers claims made against their business, if its owners, directors or employees are shown to be responsible for personal injuries to a third party or damage to property. By law any business that employs a person must have cover of at least £5m and this is often a condition of working or sub-contracting for another company.

Public Liability Insurance should also be insisted upon prior to commencing work as it will enable the homeowner or members of the public to claim, should the actions of the contractor result in negligence resulting in injury to a member of the public or damage to property.

Given the fact that the contractor will be responsible for the works prior to handing them back to the homeowner, it is also advisable for contractors to take out Plant & Machinery Insurance. This will cover them for the contract works and loss or damage to their materials, equipment and tools, whether they are owned or hired in, and avoid any delays should any loss occur.

Barrie Etchells added: “The homeowner also need to notify their insurer of the fact that building work is being undertaken on the premises so as to avoid against any refusal to cover claims for incidents such as theft caused by access to the property via scaffolding or building works.

“Price will be a factor in appointing a contractor, but for peace of mind we would urge all property owners to make sure their suppliers are properly insured in order to avoid restless nights or worse still – major bills.”

And when all the work is complete and the builders have gone, don’t forget to contact your broker to increase your levels of insurance cover to reflect the improvements made to your home.