The Business Insurance Bureau

Public liability Insurance
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Introduction

A public liability policy covers the insured’s legal liability to compensate third parties for personal injury, loss of or damage to property. Primarily, the policy covers risks damage to property. Primarily, the policy covers risks relating to the premises and activities of the business. Unlike Employers Liability, this type of cover is not compulsory but is well advised. It is often a pre-requisite in trading with other organisations.

Frequently Asked Questions

Is Public Liability insurance required by the law?

No. Public Liability insurance isn’t required by law in Great Britain, Northern Ireland the Channel Isles or the Isle of Man – other than in some rare circumstances. When it comes to trade business insurance, the only insurance that is required by law is Employers’ Liability insurance (if you have employees), though if you have a vehicle, you’ll also require car or van insurance which is also a legal requirement.

If you run a business where the actions of you, your employees or sub-contractors could cause damage or injury to people or property, Public Liability insurance should be considered highly advisable.

What level of Public Liability insurance should I buy?

The precise amount of cover that you should buy will be determined by your specific circumstances, and the insurances needs of businesses vary from one to the next. Let’s take it step by step.

Firstly, some contracts require you to have Public Liability insurance, and may stipulate a minimum level. You should check any paperwork before undertaking a contract, to be sure that you have the minimum required.

Secondly, certain employers, such as local and central government can have minimum levels of cover that they require of contractors and sub-contractors, so you should check this out.

Thirdly, some trade associations and bodies require that their members have public liability, and that this is held to a certain level. If you’re a member of a trade association, you should consider checking to see if any requirements are stipulated.

Finally, you need to consider the nature of your business, what it does, where it operates and how many employees and trainees it has. Each of these factors has an impact on how likely it is that things go wrong, and that you could be sued.

What business types do you insure?

Our policy for tradespeople covers a range of business types including Sole Traders, Partnerships, Limited Liability Partnerships and Limited Companies.

What is a bona-fide sub-contractor?

Providing an exact definition for a bona sub-contractor is not straightforward, but if you can answer “yes” to most of these questions, the worker is probably a bona fide sub-contractor:

Do they agree to do the job for a fixed price, regardless of how long the job may take?

Do they supply the materials at their own cost?

Do they hold their own public liability insurance?

Can they hire someone to do the work, or engage helpers at their own expense?

Within an overall deadline, can they decide what work to do, and how and when to do the work?

Looking at the questions above, to some extent, it boils down to the level of decision making and autonomy that the worker has. Bona-fide sub-contractors are generally deemed to be contractors who work without direction from the Insured, hold their own insurance and usually provide their own materials and tools.

Will I be covered instantly?

If you are able to provide us with all the necessary information and provide payment for your policy you will be instantly covered and full documentation will be dispatched immediately. You will not be covered if you have only obtained a quote from us.

Will I be covered if I have to work outside the UK?
This depends on the type of insurance policy you have. Please read your policy geographical limits or call us to confirm.

Do your business insurance policies include terrorism cover?

We can extend the cover to include cover against Terrorism if required. UK Insurers exclude Terrorism from the policy cover then buy it back from a specialist Terrorism reinsurance market on your behalf only if required.

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What's Covered?

Non-admission of Liability and Procedure

Failure to comply is a breach of a condition precedent to liability. Your insurers reserve the right to full conduct and control of the claim. You must assist as required.

Reasonable Precautions

Wordings vary, some require the insured to take reasonable care to prevent accidents and to comply with statutory and local authority requirements. Others require care in the selection of competent employees and remedial and precautionary steps in relation to discovered defects and dangers.

Limit of Indemnity

This is normally expressed as an amount for any one occurrence but unlimited in any one period of insurance. The limit of indemnity would be inclusive of claimant’s The limit of indemnity would be inclusive of claimants costs (incurred with insurers consent) and legal expenses.

Territorial Limits

Great Britain, Northern Ireland, the Channel Islands, the Isle of Man. Non–manual workers are covered for offshore installations in territorial waters around Great Britain and its continental shelf. Cover is also provided for elsewhere in the world for non-manual activities whilst the employee is on a temporary visit or journey.  Insurers may insist upon a UK jurisdiction clause in these circumstances and any action be brought in the UK.

Your Duty

The business description should fully describe all the activities. Any changes in the risk must be notified immediately. Ensure that the limits of indemnity are adequate. Any significant increases in turnover or wage roll must be reported to insurers. Some policies work on a ‘head count’ basis and limit the number of employees/operatives covered. Make sure this is accurate and constantly updated. 

All claims or potential claims must be reported immediately. You should never admit liability or attempt to deal with any third party without your insurers consent.

Claims Notification

Liability policies require that Insurers are notified immediately or as soon as reasonably possible to ensure indemnity is secured. Failure to comply may result in the claim being disputed.

Discharge of Liability

If a claim is likely to exceed the indemnity limit, the insurer may choose to pay the limit and costs incurred and relinquish all further liability.

Trade Specific Conditions

Businesses involved in working at or with height, depth, heat, manual ‘work away’ will have specific restrictive conditions applying to their policies which must be studied, understood and adhered to, otherwise indemnity may not apply.

Main Extensions

Legal Defence Costs

Cover is provided for legal defence costs in relation to criminal proceedings under the Health & Safety at Work Act. Fines, deliberate acts or omissions are not covered. Separately, company directors and officers should consider the purchase of Directors and Officers insurance as individuals as the company policy does not protect them.

Retrospective Cover

An extension sometimes available where an Insurer may be notified of a claim that predates inception.

Motor Vehicle Contingent Liability

Vehicles not owned or provided by the insured, may be used on the insured’s business. In the event that the primary policy (that of the employee) fails, indemnity is provided to the insured.

Third Party Working Risk

Owners hiring out plant may also need this extension to safeguard themselves against failure of cover on policies effected by the hirer.

Financial Loss

This extension, when added, brings financial loss under the policy. Cover is on a claims made basis and within the existing liability limit. This is useful for security companies where negligence can have a wide impact beyond the incident.

Data Protection Act

Provided the insured is registered under the act, liability is extended to include compensation for damages, distress and defence costs in respect of prosecutions under the act.

Libel and Slander

The insured is indemnified in respect of liability for claims Products Liability made during the period of insurance due to acts of libel or slander.

Your policy may also contain additional extensions in respect to false arrest, discrimination, accidental obstruction, car parks, cloakrooms, and a limited ‘products’ cover in respect of food or drink served to employees, partners etc.

Main Exclusions

Injury to Employees

Motor Vehicle Risks

Aircraft and Waterborne Craft

Products Liability

Advice or Treatment (Professional Indemnity)

Property Belonging to the Insured or in his

Custody or Control

Property Being Worked Upon

Contractual Liability

Pollution

Directors & Officers Liability

Offshore Work

Making it Cheaper, By Doing it Right™

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Working With Us

Which Services will we Provide you with

The Business Insurance Bureau conducts both client and market research to identify solutions to the needs of an almost exclusively business clientele. We will make a recommendation once we have assessed your demands and needs.

Payment Terms

All premiums due to insurers must normally be paid by you on or before the date that cover commences. Where alternative methods of payment are available these will be discussed with you so that arrangements can be put in place by the due date.

Confidentiality & Security

We are registered with the Data Protection Registrar. We will ensure that any information obtained from you is treated by us and anyone else involved in arranging, considering to arrange or managing your insurance, as Strictly Private and Confidential. We will not provide your information to anyone else unless we:
have your permission to do so, or -are required to by the FCA, or -are required to do so by law, or -are required to do so in the normal course of arranging or negotiating and maintaining, or renewing financial services products which we may from time to time approve.We take appropriate steps to ensure the security of any money, documents, other property or information handled or held on your behalf.

All information in any form, with the exception of policy documents and certificates issued on behalf of insurers and supplied by us, to you, should be treated as Strictly Private and Confidential and not be released directly or indirectly to any other party, without our explicit consent.

Note: in transacting your insurances with The Business Insurance Bureau, you are deemed to have accepted our Terms of Business. Your accepting of these Terms of Business does not affect your statutory rights.

Claims

You must notify us as soon as possible of a claim and circumstances which may give rise to a claim. In the event of a claim you should contact this office and we will promptly advise you and if appropriate, issue you with a claim form and pass all details to your insurer. You should not admit liability or agree to any course of action, other than emergency measures carried out to minimise the loss, until you have an agreement from your insurer. We will remit claims payments to you as soon as possible after they have been received on your behalf. In the event that an insurer becomes insolvent or delays making settlement we do not accept liability for any unpaid amounts.

Cancellation Rights

You would have the right to cancel a policy within 14 days of its inception or upon receipt of the policy documentation whichever is the later. You would as a Consumer and without providing a reason, cancel the policy by confirming this is in writing to the address of our office through which your policy was placed. Any policy documentation and in particular any legal document, i.e. Certificate of Motor Insurance, Employers Liability Certificate, MUST be returned with your instruction to cancel. By exercising your right to cancel the policy, you are withdrawing from the contract of insurance.

Duration & Termination

Our services may be terminated without cause or penalty by giving one months’ notice in writing. In the event that our services are terminated by you other than at the expiry of the policy we will be entitled to retain any fees and all of the brokerage payable. The responsibility for handling claims reported after the date of termination shall in the absence of an express agreement be the responsibility of the party taking over the role.

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