I’m a self-employed builder – do I need public liability insurance?

In the construction trade dealing with cash flow to keep suppliers and clients happy is critical and seeing insurance payments go out every month can be very frustrating. There might be some policies that you can afford to do without but, self-employed or not, public liability insurance is absolutely not one of them. Here’s why.

What is public liability insurance?

Public liability insurance protects you from a claim made by a member of the public who suffered injury or a loss because of you. As a builder, the likelihood of such a claim being made is greater than for other businesses. This isn’t a comment on the quality of your work. You are building the physical environment around us, and usually have no choice but to work in close proximity to the public so the scope for a claim, is high.

When might I need it?

An easy example to picture is if you are working at a height – say, fixing some guttering – and a tool falls and hits a passing member of the public. They can make a claim against you for their injuries, and depending on how high you were, what the tool was and where it hits them, that can be very significant. Likewise if someone gets electrocuted from a light fitting you have installed, or if your van damages someone’s property, claims can be made that PIL would cover for.

What would happen if I didn’t have it?

Public liability insurance is not there to prevent you from prosecution, it’s there to make sure claimants have a better chance of getting their compensation. That is because, if you don’t have cover and have a significant claim made against you, it has the ability to put you out of business and, if you are a self-employed sole trader, rather than a limited company, bankrupt you. It is this point that makes public liability insurance so important. But even with smaller claims, the risk for small companies, especially the construction game where cash flow is so important, are significant. Furthermore, clients look for builders with PIL. Not having it will restrict your access to business.

What else do I need to know?

Your policy will not just cover you for the cost of the award made to any successful claimant, and remember that it has to be your fault for the claim to be valid. You should also be covered for costs, expenses, ambulance and treatment costs that the NHS could seek compensation for and legal costs if you are faced with criminal prosecution. Premiums differ with the type of business you are, so it is advisable to speak to an insurance company with expertise in covering members of the construction industry. You should also look online, to tailor a quote that suits you and get a feeling for the market price for your insurance and peace of mind.

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