A family has been left facing a bill of more than £250,000 after floors collapsed during a loft extension and their builder’s insurer refused to pay out.
James Hobby, a secondary school teacher, saw his adult son injured and his family left homeless when their home in Windsor fell down eight weeks into the £38,000 job. The upper storey disintegrated, injuring five people, two seriously.
The builder, a sole trader who cannot be named pending an investigation by the Health and Safety Executive, had full public liability insurance, but when he lodged a claim his insurer, Direct Line, declared the £70-a-month policy invalid.
It said he had failed to cite three outstanding county court judgments (CCJs), one of them concerning an unpaid parking ticket, when he applied for the cover. Hobby’s insurer has also refused to pay, stating that liability for accidental damage during renovations rests with the contractor.
The refusals mean that Hobby, whose family has had to move into temporary accommodation, is now footing the full bill for clearing the rubble and rebuilding his home.
“The impact on us as a family has been terrible,” says Hobby. “We’ve been left to pick up the pieces by ourselves.”
The case has implications for other householders who could be left unprotected if insurers retrospectively invalidate public liability cover for an unrelated reason. According to the Federation of Master Builders, the construction trade body, it is almost impossible for most customers to judge whether a trader’s policy will cover them if a job goes wrong.
James Hobby and his wife were on holiday in Wales when a police officer called and told them what had happened
“A homeowner contracting a general builder can ask to see copies of public liability insurance, but will be unlikely to know the terms of the insurance and in what instances it would not apply,” says the chief executive, Brian Berry.
Work began to extend a dormer room in Hobby’s house last June. In August, when the roof was removed, the chimney collapsed, destroying the rooms below.
Hobby and his wife were on holiday in Wales when a police officer called and told them what had happened.
“We drove the five hours home and on the way the council told us our house was condemned as unsafe and we needed to prop it that afternoon,” he says. “It cost nearly £20,000 just to make the house safe and sort the site out.”
Hobby recruited his builder via the online recommendation service Ratedpeople.com. He checked the trader’s policy certificate and obtained three references before giving him the job.
Six months after the builder made his claim, Direct Line informed him that the policy had been revoked, saying that it was invalid as a result of the CCJs. Hobby says his builder “told me he was unaware of the CCJs and paid them as soon as he learned of them, but Direct Line insisted on refunding his premiums and cancelling his policy”.
Direct Line says: “When taking out a policy it is important for customers to disclose all material facts that may impact an insurer’s decision whether to provide cover.
“If a customer omits information which would not have met the underwriting criteria to provide insurance cover, the insurer may void the policy as per their terms and conditions.”
Emergency services at the property in Windsor after the upper storey collapsed. Photograph: Jamie Rose/PA
However, it is not uncommon for individuals to be unaware of CCJs in their name and, according to the credit reference agency Experian, it is rare for insurers to rely solely on self-declared information on an application form.
Direct Line declined to comment on whether it performs credit checks and, if so, why it did not discover the unpaid CCJs, which date from 2017. It also failed to explain why it took six months to consider the claim.
Ratedpeople’s checks also failed to flag up the CCJs incurred in the two years before the builder signed up. It told the Guardian it “invests heavily” in vetting applicants.
Ratedpeople says at the time the builder joined its site it checked for CCJs raised against a business name, and the builder’s firm passed these.
A spokesperson says the website’s vetting procedure is “under continuous review”. Since the builder joined it has changed the service it used for credit checks and “strengthened this part of our vetting by expanding on the existing business CCJ checks to be able to also identify CCJs raised at a personal level”.
We’ve already run through our savings and borrowed money to rebuildJames Hobby
It has removed the builder from its platform, but insists it bears no liability for Hobby’s plight.
Hobby feels he has run out of options. He cannot refer Direct Line to the ombudsman since he is not the customer. The builder has brought his own claim, but the maximum award the ombudsman can enforce is £150,000.
“We’ve already run through our savings and borrowed money to rebuild,” Hobby says. “I struggle to understand how we could have avoided this since we did all the proper checks. How can anyone have confidence in insurance cover if insurers insist on 100% accurate forms and an unpaid parking ticket can invalidate it?”