Public/General Liability
Protection from liability for accidental damage to other people’s property, including allegations of defective workmanship.
What It Covers
Accidental Damage
Damage to other people’s property, including loss of use of undamaged property
Defective Workmanship
Damage to the property being worked on due to poor workmanship
Products Liability
Damage or loss caused by your products
What Is It?
Public liability, also known as general or broadform liability, is the most basic insurance requirement for contractors. It provides cover if there is damage to or loss of another person’s property that the contractor is responsible for. Often this may be due to an unknown cause, or someone doesn’t own up to the damage they’ve caused, so the main contractor is ultimately held liable.
Definition
Public liability insurance is generally defined as indemnifying the insured party for all sums that they become legally liable to pay as Damages in respect of Personal Injury or Property Damage happening during the Period of Insurance within the Policy Territory and caused by an Occurrence in connection with their business.
Explainer Video
This short video explains the key points of public liability insurance.
Speak to an Adviser:
0800 284 584
Claim Examples
NAIL THROUGH ELECTRICAL CABLE
A house that you built or worked on burned down some time later. The cause was found to be a nail accidentally hammered into an electric cable. The house insurer will repair the home and then hold the responsible contractor liable, who then would claim on their public liability insurance.
CEILING DAMAGE
A builder who had installed roof insulation was accused of damaging the ceiling, with the homeowner demanding that he pay to fix it. Once again the house insurer would repair the ceiling and seek recovery of their costs from the builder, who would claim under their public liability insurance.
SCREW THROUGH WATER PIPE
A sub-contractor installing Gib accidentally put a screw through a water pipe. Over a period of months water leaked down inside the wall causing substantial damage. The homeowner went after the builder for compensation for the cost to repair the walls and fix the pipe. Public liability insurance covered both aspects of the claim, considering the damage to the pipe to be due to faulty workmanship.
DAMAGED WINDOWS
A builder is held liable for damaged windows, caused by someone using sandpaper accidentally scratching the frames. You’d expect that to be covered by contract works insurance. However, it probably won’t be due to that policy’s ‘faulty workmanship’ exclusion. If the damage happened during the construction then it probably wouldn’t be covered by builder’s public liability insurance either. That’s because until the contract is completed there is no third party loss. If the windows were purchased by the homeowner directly, or the damage was done after the contract was completed, then it may be covered by public liability insurance.
Policy Key Facts
This is meant as a summary of the most important items in the policy. For a complete understanding of what it does and doesn’t cover you should always read the full policy wording.
WHAT'S COVERED
- accidental damage or loss to third party property
- the quantifiable financial cost from the loss of use of property that isn’t damaged
- personal injury
The policy also has extensions to cover:
- underground services
- vibration or removal of support
- contractors and sub-contractors who don’t have their own insurance
- damaged caused by defective workmanship
- hot work
- accidental damage causing water to penetrate the external envelope of a building
WHAT'S NOT COVERED
- claims where there is no injury, damage to property or loss of use of physical property
- damage to your own property
- claims where there is no loss to another party
- damage due to faulty design or materials
- defective workmanship causing external water penetration of a building
OTHER THINGS YOU SHOULD KNOW
An excess is payable for each claim
Important Aspects of Cover for Construction Trades
In relation to property being worked on, defective workmanship and damage caused by external water penetration there are important distinctions between the cover offered by different insurers. For instance, Ando (who provide the liability policies offered through Builtin’s online portal) cover defective workmanship as long as there has been physical property damage to trigger a claim. QBE on the other hand, do not require a physical property damage trigger. In their standard wording (when it includes a “property being worked on” extension) NZI’s defective workmanship cover is similar to Ando’s, but they can extend it to be more like QBE’s cover via a “Defective Work – Trades Endorsement”.
We have produced a series of articles that explains these and other differences between and within public/general/broadform liability insurance.
How Much Does It Cost?
The cost of being held liable for damaging someone’s property could easily run into tens of thousands of dollars, not to mention the potential legal costs if you’re taken to court. Compared to this, public liability insurance is an essential investment in managing your risk.
Terms & Conditions
View our current policy wording for customers buying cover through our online portal. Specific endorsements to this wording will be individually noted on your policy schedule. In some cases we may recommend an alternative insurer, if so we’ll send you their policy terms & conditions.