It’s easy to answer the question, “who needs public liability insurance for construction?” because the simple answer is “everyone working in the construction industry”.
This includes small, one-man band businesses as well as large, national firms. It also includes sub-contractors as well as main contractors. Construction insurance is not just something that the large, national building firms need. Small businesses and even one-man bands need construction insurance as well.
Risk of unexpected costs
The simple fact is that due to the processes involved, building work is hazardous. As an example, if you are a construction industry worker you are four times more likely to die due to an accident at work. There have been nearly 200 fatal accidents in the construction industry over the past five years.
In addition to the potential for serious injuries, the chance of serious property damage is also high. Heat use increases the risk of accidental fires and, as a large amount building work happens in the open, there is a greater chance of property being stolen or damaged by a storm.
Although these risks can be minimised by taking adapting your working practices the risks cannot be totally eliminated. No matter how experienced you are and how carefully you work, accidents will still happen. When they do happen the costs can be significant and, at that point, you may well be glad of your construction public liability insurance, which will help protect your business against these expected costs.
Size doesn’t matter
It can be tempting to think that it’s only the large, national firms that need construction insurance because if you’re a small business and are only doing minor repair work, the chance of an accident is lower.
To an extent that’s true. If all you are doing is minor repairs to domestic properties, there is less chance of an accident happening than there is if you are working on large, complex projects.
But there is still a chance of an accident, and whenever there is a chance of an accident, there is a chance of that accident being serious. If a member of the public ends up being seriously injured, the compensation claim that they make could cost several hundred thousand pounds. Similarly, one moment of carelessness with a blowtorch could result in an accidental fire that causes several hundred thousand pounds in damage.
Unlike the larger, national firms, smaller businesses are less able to absorb these unexpected costs. They are also more likely to need the assistance that a construction insurance provider will be able to give them, in order to help them handle the consequences in the event of an unexpected loss.
Because of this, even a one-man band builder who only does minor building work is going to be someone who needs construction insurance.
Legal & other requirements
Although construction insurance is something that anyone working in the construction industry should have, there are two situations where you could be someone who needs construction insurance because it’s a legal requirement.
If you employ anyone, even if that employment is only on a casual basis, you are legally required to have employer’s liability insurance. Similarly, if you are operating vehicles anywhere that the public can access, motor insurance is a legal requirement. Failing to have either of these two types insurance if you are legally required to have them could result in your business facing heavy fines.
But it’s not just the law that makes construction insurance a requirement. It is quite common for the contract between a main contractors and a subcontractor to make it a requirement for the subcontractor to have public liability insurance. Often the contract will also make it the subcontractor’s responsibility to insure the plant, equipment, materials, etc. on site against damage or theft.
If you are a subcontractor, it’s quite possible that you are someone who needs construction insurance to comply with the terms of your contract.