Advantages Of Public Liability Insurance For Builders And Contractors

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Public Liability Insurance For Builders And Contractors in the UK

There is no legal law which makes it mandatory for self-employed individuals involved in the construction business to purchase public liability insurance. However, the law is very stringent when it comes to employer’s liability insurance. This difference of approach ensures that individual contractors and builders compulsorily purchase the employer’s liability insurance but conveniently forget about the public liability insurance. In fact some of these self-employed people even think it to be a waste of money to keep paying the premiums regularly for keeping the public liability insurance active as it eats into their profits.

But there is a reason as to why the law leaves the purchase of public liability insurance to a self-employed builder’s or contractor’s discretion. The biggest advantage of this insurance is that it protects the interests of the individual in case of third party claims and litigations which are a routine part of every business. Hence any person who wants his business and profits to grow should opt for public liability insurance.

In fact since these people deal with the general public on a regular basis and are also involved in risky operations like transportation of construction materials, building a structure in a public place etc. they should definitely opt for the same. To be very specific, this policy is a must for these people since they have:

• • Customers and clients visiting their office premises and any negative publicity word of mouth can damage their reputation completely,
• • People and workers working at a client’s place for work involving the renovation or remodelling of homes, setting up and installation of electrical gadgets, furniture etc.,
• • To transport materials and do work which has the potency to cause damage to public property and bodily harm to individuals.

Main purpose of this policy

The main duty of this policy is to protect the builder or the contractor from huge compensation costs which might cripple his business and eat into its profits. This purpose is achieved by ensuring that when a third party claim is raised on an individual involved in the construction process, it is reviewed and compensation granted to genuine claims in cases of:

• • Property damage wherein compensation is given to ensure that the damaged parts are restored and renovated and
• • Physical or bodily injuries incurred wherein the compensation is made so that all medical expenses are fully covered.

Another way by which this insurance helps to protect their interests is by making it financially possible to file a law suit against a claim. Instances wherein such a situation can arise are:

• • When an inflated compensation claim is made by a third party and
• • The claim made is not genuine.

When defending a law suit, legal fees and all other expenses incurred by the self-employed builders and contractors, as mandated by the terms of the policy in this regard, are reimbursed till such time as the case is sub judice in the court of law. Of course the reimbursement of compensation given can only be disbursed up to the maximum limit of the coverage and any expense over and above this limit has to be borne by the individual. Thus it is very important to properly calculate the coverage required so that the insured party can make maximum utilisation of all the benefits offered by the public liability insurance. 

Lifeline for small and medium businesses

The need for this policy does not depend on the size or volume of the business being done by the self-employed builder or promoter.  In fact people involved in businesses with a small or medium volume have a greater need for this policy. Since both the annual turnover and profit margin for these businesses is relatively small, any compensation meted out can act as a crippling blow to the financial health of the same which might be difficult for the self-employed builder or contractor to absorb and bounce back from.

Thus there are several advantages associated with the purchase of the public liability policy. While some are quite apparent, other benefits can only be felt as it keeps proving its worth during the course of an active business or service provided by an individual. Opting for it is thus a profitable decision for all concerned people.