As a New Contractor, What Is and Isn't Covered by Public Liability Insurance?

If you are a skilled tradesperson and have decided to set up as a new contractor, you need to pay careful attention to insurance. While you know that you will need public liability insurance, it's important to understand what this is and, crucially, what it is not. So, how can you ensure that you get the best protection possible?

Understanding Public Liability Insurance

Public liability insurance is essential for a contractor. It will protect you and your business should somebody claim that you have caused damage to themselves or their property as a result of your actions while at work. If you employ other contractors, this insurance will also cover them if they are officially working for you, but it does not cover subcontractors. They should have their own public liability insurance, and you should check this before you take them on.

This type of insurance will also cover your costs if you need to defend the claim, including your lawyer's bills.

What Is Covered

It's easy to imagine a scenario where an accident may happen and you may injure the interests of a third party. If you are a plumber, a pipe you are working on may break, leading to a flood and causing damage to the client's property. You may leave a toolkit on the floor while working on a job, and the customer may trip over it, leading to a broken arm. In these and other cases, the customer will expect to be compensated, which is where your public liability insurance will come in.

What Is Not Covered

However, there may be certain exclusions, and you need to understand what they are so there are no surprises. For example, you cannot claim against this coverage for damage to your own property, and if any damage was due to deliberate or illegal actions on your part, you could not claim.

Note that if you need to give some professional advice as part of your contractual offerings, any issues related to that should be covered by a separate professional indemnity policy.

Specialised Exclusions

If you handle renovations, dismantling, demolition or other remedial jobs and there is asbestos involved, talk with your insurance adviser first. Public liability insurance may not cover damage or injury from asbestos exposure, and you may need a specialised policy instead.

Getting Further Information

If you have any other questions about your coverage, discuss them with your insurance adviser. Their job is to assess your needs and set you up with the correct policies.