With a large customer base operating in the construction trades we deal with a lot of liability claims. There are some issues that, while not common, could trip you up if you are not aware of them.
The Right Occupation
Liability and professional indemnity policies cover the insured person for the occupation and/or activities shown on the policy. For example, if your occupation is shown as a plumber, but you also do some roofing work, then a claim related to roofing may not be covered, as you are only insured for the activities of a plumber. Make sure when you take out cover, or renew it, that your policy accurately reflects what you do.
While we appreciate that it is often tempting to try and resolve an issue before bringing it to your insurer’s attention, this can actually jeopardise your cover if you need to make a claim later. Your insurance contract obliges you to notify the insurer of a potential claim, and they have the right to become involved.
For example, if you negotiated with a customer and made an offer, or rejected one from them, you may find that your insurer restricts what you can get as part of a claim to those previously made or rejected terms. Usually however the insurer will only have cause to do this if your early admission of liability or offer of settlement has prejudiced their handling or settlement of the claim.
Prior Legal Costs
Similarly, if you have engaged a lawyer and incurred costs before getting your insurer involved you may find that they won’t cover those fees.
Claims or Circumstances at Renewal
When you renew your policy you must tell the insurer if you are aware of any potential claims or circumstances that could give rise to a claim. Failure to do so at renewal may result in a future claim being declined or cover limited.
In a nutshell
Liability and indemnity cover can be incredibly complicated and claims can be costly. Getting the right advice and support is key to achieving the right outcome. Not every event is covered, but a better understanding of how the policies work will reduce frustration and misunderstanding of what you are and aren’t insured for.