Heritage Insurance Business Panel Q&A: 6

As part of this week's Business Panel, Stuart Butler, Client Relationship Director at Heritage Insurance, reminds businesses to check the public liability insurance of contractors they employ to carry out work.

Question 6:

Our firm needs to have some work done to its office accommodation – do we need to worry about what public liability (PL) insurance our contractor has?

Stuart Butler replies:

This is a potentially fraught area as in simple terms no contractor can have too much cover in circumstances like this.

After all, there is little point a plumber working on your property using heat having a PL limit of £1m. if they cause a fire that destroys your £10m. commercial premises, never mind additional costs relating to any loss of income or alternative accommodation.

Equally, having your own insurance is fine but the contractor’s inadequate cover could mean your own insurers being unable to recover their full outlay from whoever is doing the work, so you would then end up with a large claim on your insurance, which may lead to penal terms at your next renewal.

In addition, there is the possibility of your insurance not covering what you are having done, for instance if they have not advised that you they are opening the roof to install some new equipment or the contractor’s insurance could fail e.g.  if they have not notified their insurers that they use heat and are not covered to use it or they fail to comply with a warranty that invalidates their insurance.

Unfortunately, properties being worked upon by contractors are a much higher risk and damage caused by water or fire is very common.

In short, it pays to take advice from a specialist broker before starting any work to ensure you really are protected.

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