20 Nov 2017

Understanding Public Liability Insurance - Six Points to Consider

Understanding Public Liability Insurance: Six Points to Consider 

Public liability cover may not be a legal requirement – but is often regarded as a business essential. Many contractors and consultants will simply not operate without it, as they see it as a vital safety net to protect them should things go wrong and a claim is made. 

So, what is public liability insurance and what do you need to know before you buy it? 

In essence, public liability covers your legal liability for accidental injury or property damage claims made against your business as a result of your negligence. It can’t prevent accidents from happening of course, but will cover the cost of compensation, damages, and any legal costs incurred by third parties making successful legal claims against you. 

To give an example, if you were involved in the installation of electrical wiring that later proved unsafe, causing injury to a third party, it could be deemed that you were negligent in carrying out your installation. In that case your public liability insurance would pay any costs and compensation – up to the maximum level of cover (or limit of indemnity) set out in your policy. 

Of course, the precise nature of the cover you need will depend on the kind of projects you are typically involved in – you must be clear of your requirements, the risks and issues you face, as well as the cover available before you buy. 

Here are six key points to consider when thinking about public liability insurance: 

  1. ​Work out if you need public liability insurance: Given the nature of your work as a CHAS member, it’s very likely that you need public liability cover to protect you should something go wrong. If you have any doubt, speak to an expert before deciding not to take out cover. 
  2. Think carefully about how much public liability insurance you need: Public liability policies generally offer cover ranging from £2 million to £10 million – though the exact level of protection you take out depends on the level of risk you are exposed to. As a starting point, find out how much cover potential clients expect you to have. 
  3. Make sure you use an accurate business description: You will probably be involved in a wide range of inspection or consulting activities and a general description of your business activities may leave you exposed – with cover that doesn’t accurately reflect what you do. A good business description is more specific – for instance ‘health and safety consultancy, including electrical inspection, construction site reviews and retail unit risk assessments’. 
  4. Consider whether you are likely to be involved in ‘heat work’: Most insurance policies contain a ‘hot works’ condition which will apply if you are involved in work that employs tools such as blow lamps, blow torches, flame guns, hot air guns, welding equipment, or cutting equipment and angle grinders. If so, you’ll need to take a range of precautions, such as making sure suitable fire extinguishing appliances are available for immediate use and ensuring the work area is cleared of all combustible material. 
  5. Be aware of depth and height limits: Insurers providing public liability cover need to know the maximum height and depth you will work at while they are providing cover. Always ask what an insurer’s maximum limits are before you buy – if you exceed these limits you will not be covered if something goes wrong, and you may end up having to turn work down. 
  6. Ask about policy exclusions before you buy: As well as telling you what they cover, most insurance policies are explicit about what they don’t protect against, or what is excluded from the cover. Some common examples include work involving asbestos or demolition, work at high risk locations like airports, railways, docks or harbours, quarries and oil refineries, and the cost of rectifying defective work. You may need specialist policies to cover these kinds of activities or locations. ​

At Jelf, we provide advice and can arrange cover for public and employers liability, tools, plant hire, legal expenses, plus many more additional covers are available too. 

We’ve worked with CHAS to offer straightforward business insurance for you. To find out more visit www.jelfsmallbusiness.co.uk/CHAS to get a no obligation quote online, or call us on 01905 892 360 and we’ll discuss your requirements and arrange cover over the phone. 

CHAS 2013 Ltd is an Introducer Appointed Representative of Jelf Insurance Brokers Ltd (Jelf) and does not form part of the same group as Jelf. CHAS is a trading name of CHAS 2013 Ltd whose company number is 08466203 and whose registered office address is Civic Centre, London Road, Merton, SM4 5DX. Jelf Small Business is a trading name of Jelf Insurance Brokers Ltd and Jelf is a trading name of Jelf Insurance Brokers Ltd (Reg No. 0837227)* and Jelf Wellbeing Ltd (Reg No. 2647586) which are part of Jelf Group plc (Reg No. 2975376) and are all registered in England and Wales at Hillside Court, Bowling Hill, Chipping Sodbury, Bristol, BS37 6JX. *Authorised and regulated by the Financial Conduct Authority (FCA). Not all products and services offered are regulated by the FCA.