The risks in basement developments

Basement extensions have become a more mainstream way of providing extra space and adding value to a home or commercial building, especially in heavily built-up areas such as London and the south east.

Claridge’s Hotel in Mayfair is undergoing major civil engineering works to create a new basement under the entire footprint of its 1920 art deco wing, with four further levels of basement to be added by the end of 2018. All this is to be accomplished without the hotel closing its doors to its guests for a single day.

As reports in the media have highlighted, digging out residential basements to create extra accommodation is becoming increasingly popular, especially in fashionable parts of London, and has led to the rise of what has been termed ‘iceberg homes’, with three or four storey basements. High-profile celebrities planning major underground extensions have found themselves crossing swords with their neighbours who fear for the safety and stability of their homes.

Following concerns raised in Parliament in 2016, the Department for Communities and Local Government called for evidence about the impact of basement development. The consultation looked at two specific areas, the planning process and use of permitted rights, and the proliferation of basement developments and the areas in which they were taking place. However, with Brexit on the horizon, the outcome of the consultation has yet to be published.

Construction risks

The Health and Safety Executive has reported that more than a third of the projects of this type that they inspected violated at least one health and safety regulation. Therefore, construction firms need to familiarise themselves with proper health and safety procedures, and be aware of liability insurance considerations in order to minimise potential risks to their business, employees and property owners.

In most instances, a basement construction project will present risks to the existing and neighbouring structures, the homeowners and the workers on site. This means that there are checks and procedures that must be undertaken and followed when embarking on this type of project, including:

• Identifying existing underground services such as plumbing, gas, electricity and telephone lines and ensuring they are adequately protected during construction
• Having a safe entry and exit plan in place for workers
• Supporting all sides of the structure to prevent movement or collapse
• Adequately protecting against damage to neighbouring buildings
• Putting effective barriers above ground to prevent anyone falling into the excavation
• Ensuring that the site is properly ventilated during construction
• Choosing the right type of waterproofing system for the level of risk involved.

These risks can be addressed by ensuring that only well-qualified sub-contractors are employed, workers have adequate training in how to work safely in confined spaces, are experienced in the use and operation of temporary support structures, and know how to deal effectively with underground services.

Appropriate insurance cover

Policies needed to cover the risks involved in basement construction may include:

• Contractors liability to cover against negligent injury or property damage
• Professional indemnity insurance to cover errors or omissions in service, advice or design
• Hazardous Location Liability cover to cover the risks of working underground
• Contractors All Risks to cover ongoing renovations, extensions, or other works until completed
• Party wall insurance to cover neighbouring property.

How we can help

Cover for this type of work is not always automatically covered under a standard contractors’ policy, but can be made available subject to full disclosure of the work involved. If you would like to discuss any aspect of insurance for a basement extension, then please contact us on 0345 345 0777.