Insuring a timber frame or modular build in Ireland

Timber frame and modular houses change two things for insurance. While the frame is open, fire is the main risk to the works. And part of the house is built somewhere else, so you need to know who owns and insures it before it arrives. A contract works policy is insurance for the building work itself, its materials and the builders’ equipment. Either you or your main contractor (the builder in charge of the whole job) buys it, so agree in writing who will. Ask your broker about fire conditions and about off-site ownership before you commit. For choosing between timber frame, block and ICF on cost, speed and energy, read timber frame vs block vs ICF. For the general picture of self-build cover, read self-build insurance in Ireland.

Why do insurers ask about the build method?

Insurers price and condition cover on how likely a loss is and how bad it would be. Timber frame is combustible while it is open, before fire stopping, plasterboard and cavity barriers are in place, and a fire in a frame under construction can spread quickly. HSB, an insurer’s engineering arm, says in its guide Fire on construction sites that if a project involves a timber frame, significant additional control measures will be required.

That does not mean every insurer refuses timber frame, or that a premium is higher by a set amount. It means the broker should be told the exact system, and the insurer may attach conditions. Give the broker:

• the type of system. Open-panel: wall frames delivered with no insulation or cladding fitted. Closed-panel: frames delivered with insulation and sheathing fitted. Structural insulated panels (SIPs): solid insulated boards. Volumetric: complete rooms built in a factory and craned into place;
• the cladding, insulation and roof build-up as designed;
• who makes it and who erects it, and the build programme;
• any certificate the system holds. Ask the supplier which certificate or assessment covers it, for example one showing it meets the Irish timber frame standard I.S. 440.

Ask for any acceptance and conditions in writing, and keep them with your policy documents.

What conditions might apply while the frame is open?

Examples from two published sources, both listed under Sources: the HSB guide Fire on construction sites (HSB is an insurance engineering firm that advises insurers and builders), and the policy text, called the wording, that Optis publishes for its Irish self-build insurance. They are not rules for every policy. Ask your broker which, if any, apply to yours.

• A fire safety plan. The loss-prevention guide says the control measures for any remaining fire hazards should be recorded in a fire safety management plan, and that security should be actively managed on site, usually by the main contractor. It also says that compliance with the Joint Code of Practice on the Protection from Fire of Construction Sites and Buildings Undergoing Renovation, published by the Fire Protection Association, may be a condition of the insurance policy.
• Hot works controls. Hot work means grinding, cutting, welding, blow lamps or anything that makes heat or sparks. The same guide says hot work should be designed out of the project and replaced with cold methods wherever possible, and strictly controlled by a permit where it cannot. One published self-build wording makes a permit-to-work system a policy condition, with a fire extinguisher and a trained worker present, and the area checked one hour after the work.
• Fire compartments early. Fire compartments are sections of the building sealed off so a fire cannot spread through all of it, and fire stopping is the sealing of gaps and voids that would let it. The Optis wording requires fire compartments to be installed as soon as possible and waste cleared at the end of each working day. For timber frame, the loss-prevention guide suggests sequencing compartmentation and fire stopping at the earliest stage, and avoiding smoking, charging of electrical equipment and petrol-powered equipment in the frame.
• Storage of fuel and gas. Flammable liquids and gases kept well away from the building and from any hot work.
• Consequences of breaking a condition. In the Optis wording, if you break a condition the insurer may refuse to pay, unless you can show the breach did not make that loss more likely. Read the conditions section of your own policy for the equivalent.

If you are the person arranging the policy, you are the one who has to make sure the conditions are met on site. A main contractor can manage these conditions on site. If you manage the build yourself (project manage), you must include them in each trade’s instructions. Ask the erector (the firm that puts the frame up) for a method statement, a written plan of how they will work safely, covering fire and site security, and ask the broker whether it satisfies the insurer.

Who insures panels or modules before they reach the site?

Panels or modules can be in production for weeks, then in a yard, on a lorry and on a crane before they are part of your house. At each step, ask who owns them and whose insurance responds.

Stage	Question to ask	Why it matters
In the factory	Who owns the panels or modules, and who insures them?	Check the supply contract: it may leave the panels or modules on the manufacturer’s own cover until ownership passes to you or the contractor
In a yard waiting for delivery	Are they stored separately and marked for your project?	One published wording covers stored materials only if they are separately stored and identified for a specific contract
In transit	Does your policy or the haulier’s cover the load, and up to what limit?	Transit cover often has a low limit and conditions on unattended vehicles
Loading, craning and setting	Who is liable for damage while lifting, and whose policy pays?	Get the crane operator, haulier and erector to confirm in writing whose insurance covers damage during the lift
On site, before the roof is on	Is it covered by the contract works policy, and are the fire conditions met?	This is where the fire conditions above matter most

In the Optis wording, transit cover applies to damage while panels or modules travel to or from the site, including loading, unloading and storage on the way. It excludes transit by sea or air and anything left in an unattended vehicle unless the vehicle is locked in a secure enclosure with the keys removed, and it is capped at €25,000 for the project. Its off-site storage cover applies only where the contractor is responsible under standard printed contract conditions (a standard form building contract, not a supply-only order), the value of the goods is included in an interim certificate (the architect’s or engineer’s sign-off that a stage is complete and payable), and the goods are separately stored and identified for the contract. If you pay the frame supplier directly rather than through a builder’s certificate, this off-site cover may not apply. Ask your broker whether your policy would respond, and ask for the limit, not a general assurance.

Who owns what you have paid for?

With off-site manufacture you may be asked to pay while the frame is still in a factory. Your lender may also be asked to release money before anything is on your site. Two questions decide how exposed you are.

1. When does ownership pass to you? Ask your solicitor to read the supply contract. Look for terms about the point at which ownership of the panels or modules passes, and any retention-of-title clause, which lets the manufacturer stay the owner until it is paid in full.
2. Is what you paid for identified and insured? If the supplier will not confirm ownership and insurance in writing, do not pay the deposit or stage payment. Ask for confirmation that the panels or modules are set aside for your project, marked, and insured for at least the amount you have paid, and ask to see a certificate rather than take a promise.

A deposit for goods you do not yet own is a risk you carry if the manufacturer fails. Your lender has the same concern: it will want to know what its money has paid for. See staged drawdown, where the lender releases your loan in stages as the build progresses, and the mortgage lenders compared guide for what each asks. If the manufacturer or builder fails after you have paid, what to do when a builder goes bust or walks off site explains the steps, including what a lender will ask for.

What about warranties and structural defects cover?

Structural defects cover (also called a structural warranty), sold by specialist providers, is a separate insurance that protects a buyer or lender against faults in a new home’s structure for a set number of years. A lender or a later buyer will usually ask whether you have one. For a timber frame or modular house, ask the provider:

• whether your system is accepted, or accepted with extra conditions;
• which inspections, certificates and design documents they need from the manufacturer and your designer;
• whether the cover continues if the manufacturer later stops trading.

See structural defects cover and what lenders require. Ask the lender before you sign a supply contract whether it accepts the structural defects cover provider you plan to use. Your designer or the manufacturer can usually name the providers that accept the system.

Do not forget the other insurance

Everything above is about the works. The usual covers still apply, and you should ask your broker to confirm in writing which are included and which the builder’s own policy provides: public liability, employers’ liability for any firm with staff on site, and cover for your own materials. The HSA explains a homeowner’s role in construction. A crane lift over a road or a neighbour’s boundary is worth raising with the broker, since liability for damage to others’ property sits under public liability.

What should you send a broker?

• the address, planning permission reference, expected start date and build cost;
• the system: open-panel, closed-panel, structural insulated panels or volumetric modules, with the manufacturer’s name and any certificate;
• the build programme, including when the frame is erected and when the roof is on and the shell is weathertight;
• who runs the site and who is responsible for fire safety and security while it is open;
• the supply contract’s payment stages and when ownership passes to you;
• the delivery arrangements, including the haulier, the crane and the access;
• the lender and what it needs.

Ask for answers in writing, including any conditions, limits for transit and off-site goods, and whether anything in the quote depends on the frame being weathertight by a date.

What to do next

1. Ask the supplier for the ownership terms, the stage payments and the certificate for the system.
2. Ask your solicitor to read the supply contract before you pay any deposit.
3. Tell your broker the exact system and ask for fire and site-security conditions in writing.
4. Ask the builder or erector for a fire safety plan and hot-works method statement (the written plan for any work that makes heat or sparks), and confirm they are compatible with the policy.
5. Ask the lender which structural warranties it accepts for your system.
6. Check which covers your project needs, then take the result to a broker.