As the title suggests, this type of insurance can range from one man bands seeking basic Public Liability, through to large construction companies with multi million pound turnovers.
Basic policies are normally underwritten on a per capita basis (i.e. a rate charged per person under each section of cover) and are sold in indemnities from £1,000,000 to £5,000,000 (local authority work requires the higher amount). We believe the highest award which has been set by the courts stands above £3 million.
Larger risks tend to be rated on turnover and wages, these need to be current as they reflect the degree of activity. It’s also important to split the figures between high and low risk activity to ensure the most competitive of terms.
In addition to Public Liability cover you can include Employers’ Liability (a statutory requirement), tools, contract works, own or hired-in plant and stock of materials.
Public Liability covers damage or injury to third party property or persons due to negligence on your part, it usually excludes the item actually being worked upon. Normally you would be asked to bear a £250 excess on third party property damage to avoid small claims. No excess applies to personal injury or Employers Liability claims.
In order to provide flexible cover many insurers allow automatic cover for temporary workers and the use of bona-fide sub-contractors, but you do need to check the individual policy wording. Insurers are increasingly requiring that you check and record the current insurance policy of your sub-contractors (which should at least equal your own indemnity) as they expect to pass a loss in the direction of their insurers if it is due to the subcontractor’s negligence.
If you have premises for use as a workshop or store or use fixed power driven wood working machines these need to be disclosed to insurers.
Finally on the subject of Public Liability, certain clients need to consider options such as efficacy (the failure to perform a function), financial loss (when no actual property has been damaged but costs still incurred), professional indemnity (particularly if you design or test or give advice for a fee), JCT clause 21-2-1(imposed on contracts by architects), asbestos (a standard policy exclusion) and directors and officers (to protect your own assets if issued in a private capacity) all of these can be sourced on specialist policies at BH&S.
The classification of workers from the Insurance stand point can differ from the tax situation. If you direct and control how someone works for you, a master/servant relationship exists and you should effect employers’ liability cover, particularly if they use tools or equipment supplied by you. Bona fide sub-contractors must have their own insurance or they will not be treated as such by Insurers.
Employers Liability normally has a standard £10,000,000 indemnity, however, if you have high earners or numerous staff which may be affected by a single event you may wish to seek a higher indemnity.
All policies normally contain warranties which are a condition of cover. These may restrict what you can work on or how you can work. Examples include the height or depth to be worked at and require searches/enquiries on the position of pipes and cables.
All policies extended to include heat would have a warranty which will require a system of check and the need for suitable extinguishers. In certain trades the indemnity would be restricted and you may need to effect excess of loss cover as a top up. It is vitally important that you comply with these conditions as the policy may be voided by working outside of these agreed conditions.
Please be mindful of single article limits for tools and the overall value at risk as theft of such items is a common factor in many claims. Theft from unattended vehicles overnight is not standard and if added is normally subject to conditions, please ensure you check and comply with these.
Contract Works cover can take two forms: a specified contract for one job where cover is affected by the contractor who includes the cost in his quote for the work. Or an annual policy to cover all projects throughout the year is arranged. In both cases cover is for all risks and theft on the structure and materials to be incorporated in the project until it is completed (or cover expires).
If you hire-in plant you will now be expected to arrange damage and road cover under the terms of the hire agreement. Self-build projects need to be effected prior to starting work and not when you may perceive you have something of value. Many insurers will not become involved after the project has started.
Correct cover is important as society becomes more litigious. Please speak with us to ensure the cover meets your requirements.