A builder can choose from a broad palette of insurance options when seeking to insure their business. Many of the types of insurance available are not required by UK law, though one – employers’ liability insurance – is a notable exception for any builder who employs someone else.
For a builder, where choosing the right kind of insurance can get tricky is when the non-compulsory options are on the table. Examples of such options include tools insurance and plant and machinery insurance, two types of cover cited on the Planning Portal website.
However, one particular type of non-compulsory insurance rises above all others in worthiness of consideration – and this is public liability insurance. Whether you are looking for a reliable builder or are a builder yourself, here is why every builder ought to hold public liability insurance…
What exactly is public liability insurance?
Public liability insurance is so-called as it is intended to financially provide for third parties – rather than the builder – should the latter be guilty of a work mishap adversely affecting these third parties.
For example, if you are a roofer and a slate which you accidentally knock off the roof hits a passer-by and injures them, you would be deemed liable. This would entail you having to pay compensation, but from where would you get the money? It could come from your public liability insurance policy.
Similarly, you might be involved in building work which inadvertently inflicts damage on neighbouring properties, implies the Consumer Protection Association. In this instance, too, you would need to shell out financial compensation which would fund repairs to the damaged homes.
Does a builder really need public liability cover in practice?
Here, the term “in practice” rather complicates the question, but it’s also worth drawing attention to the use of “need”. A builder might be tempted to skip taking out public liability insurance since it is non-compulsory. However, in doing so, they could be taking a big risk.
After all, if the builder does become liable to pay compensation, it might not be practically possible for them to pay it out of their own pocket. This is where public liability cover can provide a highly appreciable “cushion” for a builder who could otherwise end up in a difficult financial situation.
It’s also worth heeding the warning of the Federation of Small Businesses that some clients, in their contracts, might insist that a builder who wants to work with them needs public liability insurance.
Furthermore, some membership bodies and regulators might prevent building businesses joining their schemes if public liability insurance is off the table. This is another reason why, if you come across builders without such cover, you should probably think again about using these builders.
What exact costs can public liability insurance help a builder to meet?
If a member of the public suffers an injury or property damage due to a builder’s incompetence, builders public liability insurance can fund compensation payments as well as legal costs and expenses of fighting a claim.