A Public Liability Insurance Guide For Roofers
Roofers face more insurance worries than many other businesses.
As well as covering accidental damage of the building you are working on and insuring your van or lorry, you need to check that your sub-contractors also carry insurance. You also need to ensure that if you ever use any heat source this is declared to your insurance company. Some insurers even consider a soldering iron as a heat source!
What Are Sub-contractors?
Sub-contractors are all of the other businesses and workers that help you with your contract(s). These can be Labourers, Builders, Electricians and Scaffolders to name a few. Your insurers will normally expect that you keep written evidence that you have checked your sub-contractors insurance. This would normally be by obtaining a copy of their Public Liability Insurance certificate.
The reason for this is that if an accident happens, your customer will initially make a claim against you. Your insurers will then look to pass this down to the sub-contractor that caused the incident. If they do not hold any insurance and you cannot prove that you checked they had any, then you may be personally liable!
Alternatively you may have a copy of their Public Liability Insurance certificate, only to find that their policy is not valid. Unfortunately we do find that a lot of businesses cancel their insurance not long after taking out the policy. We suspect that in many cases it was only purchased to obtain their certificate. Additionally, an increasing number of people are buying their insurance via comparison sites, and entering false information to obtain cheaper premiums. The end result of this is that their policy will not pay out any claims because they have made a false declaration. They have simply bought a piece of paper!
Due to this the sub-contractors are personally liable, however unless they can pay thousands (or tens of thousands) of pounds, they wont be able to compensate the claimant. In this case the claim will be bouncing back to you. Your insurance policy needs a “contingent liability” clause if your insurers are going to entertain the idea of defending you against the sub-contractors claim.
You can alternatively include sub-contractors under your insurance policy. We call these workers “labour-only sub-contractors” and the ones that run their own business “bona fide sub-contractors”. The definition of what defines a bona fide sub-contractor varies between insurance companies, but one definition is: “works for an agreed price, supply their own tools and equipment, not paid until the work is complete and returns to carry out remedial work”. Most insurance companies also require them to carry their own insurance, and if they don’t your insurance may be invalidated. If you sub-contract to another contractor, you need to make sure that you have an “indemnity to principal” extension.
For more information about Employers Liability, head to the government website https://www.gov.uk/employers-liability-insurance.
A quick check list of things to insure
Do you own your workshop?
- If so, you need buildings insurance!
Add up the cost of your equipment (as new) plus stock (at trade value) and arrange contents cover.
If you are a tenant, do you have a responsibility for anything your landlord has provided such as a shop front (including the glass)? Did you do anything to the premises when you moved in? This could be decorating, building a counter, sign writing on the glass or installing more cables?
- If so, add tenants improvements to the policy. This is because if this was damaged in a fire your landlord will probably not be replacing it.
Make sure you have public liability cover for visitors to your work place. You will also need to have public liability in case you accidentally damage your customer’s property or injure them.
If you employ any staff, or you are not the sole worker in a limited company, you will require employer’s liability by law.
Don’t forget yourself! If you have an accident or fall ill, you may be earning no (or less) money. A personal accident and sickness policy is a simple solution, although a financial adviser can advise upon a wider range of solutions.
When you buy Public Liability insurance, make sure to check these points
Have you declared all of your work?
Have you advised all of your work places?
- There will always be excluded work places (such as nuclear power plants or factories). Normally there will also be height limits (a 15m height limit is very common).
Does it cover the use of any heat?
- If you use heat and this has not been declared, the insurers can decline a claim even if heat wasn’t used! This is because you have made a false declaration to obtain the insurance to start with.
Does it cover the use of sub-contractors?
Does it include “contingent liability” cover?
Does it include “indemnity to principal” cover?
What is the excess?
- We have seen excesses as high as £10,000! Unless you can put your hands on this sort of money within a few weeks (and can afford it), we think you should find a policy with a lower excess! Bear in mind that heat-related claims will often have a higher excess.
A responsible business makes sure they have all of the relevant insurance policies in place as soon as their business starts. They also make sure they are all renewed when they are due! The main insurance policies you require by law will be Motor Insurance for your vehicles and Employer’s Liability insurance if anyone works for you.
You may be surprised to learn that if you are the owner/director of a Limited company but you are not the sole worker, you will legally require Employer’s Liability for yourself. For example, your partner or a friend may help you with paperwork. If it was found that you did not have Employers Liability when you legally required it, the fines can be as large as £2,500 per day you did not hold this cover!
Well, the good news is that there are specialist providers like Versatile Insurance. We welcome enquiries from roofers that use heat and from roofers that don’t. We already insure many, many businesses like yours around the country and are keen to build upon our success.
The writer of this article, Ray Colenutt Dip CII, has over 30 years of arranging insurance in the construction industry. Ray is also the managing director of Versatile Insurance Professionals Ltd.