A new deposit protection insurance to protect homeowners has been launched by the Federation of Master Builders (FMB).

The insurance offers two level of protection for deposits up to £1000 and deposits up to £5000 and can be offered by any FMB member who has been trading for three years or more.

The insurance will protect the client if the building firm ceases to trade, for example if the company becomes insolvent or the owner dies, before the building work begins. The insurance can cover up to 10% of the contract value or the actual deposit paid up to £5000.

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FMB members who are accredited to its National Register of Warranted Builders (NRWB), a wholly owned subsidiary of the FMB, can already offer their clients a range of insurances but the deposit protection insurance is the first time that all FMB members (as long as they have been trading for three years or more) can offer any insurance to their clients.

David Hill, Director of NRWB said: "The uncertain economic times have meant many homeowners are often scared to part with any money. The FMB's new deposit protection insurance will help remove this worry for homeowners. The FMB now offers protection for every stage of a building project and is another reason why it makes sense to use an FMB member."

(CD/GK)