PUBLIC LIABILITY INSURANCE

Public liability insurance protects you from claims for accidental loss or damage to other people’s property (and in some cases injury). Our policy automatically includes cover for the building you’re working on and optional cover for damage caused by faulty workmanship , which are common exclusions under policies offered by general insurers.


DEFINITION

Public liability insurance is generally defined as indemnifying the insured for their legal liability for damages in respect of accidental damage to another person’s property (and in some cases injury), happening during the period of insurance and that is caused by an event in connection with the business of the insured.

EXAMPLES

NAIL THROUGH ELECTRICAL CABLE

If a house that you built or worked on burned down some time later, and the cause was found to be a nail accidentally hammered into an electric cable, the house owner or their insurer will probably hold you liable, either as the main contractor, or as a sub-contractor. In that case you’d expect your public liability insurance to cover you, wouldn’t you? Well, sorry – not so.
Most insurers deem the house to be a product on which you have been working, and general public liability policies exclude cover for the product itself, only covering third party property. So, if the house next door also burned down because the fire spread, you will probably be covered for that, but not for the original house! Our policy is designed specifically to cover you in such situations.

CEILING DAMAGE

In another recent example a builder who had installed roof insulation was accused of damaging the ceiling, with the homeowner demanding that he pay thousands of dollars to replace it. The builder made a claim to his insurer, but this was denied because they said the ceiling was the product on which he had been working, which was an exclusion under his policy. With Builtin’s Public Liability insurance that claim would have been paid.

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 then went after the builder for compensation. You’d expect that to be covered by your public liability insurance, but it probably won’t be, because the insurer could say that the wall was the product being worked on, which is excluded. And the cost to repair the pipe won’t be covered either, because most insurer’s policies exclude ‘faulty workmanship’. Our policy covers the property you’re working on and offers an optional extension to cover damage caused by faulty workmanship.

DAMAGED WINDOWS

And what if you are held liable for say, damaged windows caused by someone using sandpaper on the frames? You’d expect that to be covered by any contract works insurance policy, but again it probably won’t be, because of the ‘faulty workmanship’ exclusion. So, the owner or their insurer will seek recovery from the main contractor and/or subbies on the job at the time. Many public liability policies still exclude liability for faulty workmanship (though usually resultant damage is covered), so no cover again! Our policy offers an optional extension to provide cover.

HOW MUCH DOES IT COST?
The cost of being held liable for damaging someone’s property could easily run into thousands of dollars, not to mention the potential legal costs if you’re taken to court.  Compared to this, public liability insurance premiums are an essential investment in managing your risk.

Premiums start from as low as $300 + GST per year, depending on the size of your business and the amount of cover you need.

POLICY KEY FACTS
This is meant as a summary of the most important items of the policy.  For a complete understanding of what it does and doesn’t cover you should always read the full policy wording.  Standard excesses and limits are shown, these may be subject to change, check the specific wording of your policy.

WHAT'S COVERED
Limit/Sub-Limit Excess
INSURING CLAUSE
Public & Products Liability, Costs & Expenses Limit of Liability $500
AUTOMATIC COVERAGE CLAUSES
Advertising Liability $1,000,000 $1,000
Business Advice or Service Limit of Liability $500
Contractors or Subcontractors Additional Insureds Limit of Liability $500
Costs of Representation at Disciplinary Proceedings $500,000 $500
Forest and Rural Fires Act $500,000 $500
Goods on Hook $250,000 $2,500
Landlord’s Liability Limit of Liability $500
Lost or Stolen Keys $50,000 $1,000
Mechanical Plant Liability Limit of Liability $500
Product Withdrawal Costs $100,000 $2,500
Property in Care Custody or Control $250,000 $1,000
Punitive or Exemplary Damages $1,000,000 $500
Tenant’s Liability Limit of Liability $500
Underground Services $1,000,000 $1,000
Vehicle & Watercraft Service/Repair Liability $250,000 $2,500
Vibration and Removal of Support $1,000,000 $5,000
Visits to the North American Countries Limit of Liability $500
OPTIONAL COVERAGE CLAUSES
Professional Liability (exclusion 17 deleted) $100,000 $2,500
Defamation (exclusion 5 deleted) $100,000 $2,500
Faulty Workmanship (exclusion 6 amended) $100,000 $1,000
ADDITIONAL COVER AVAILABLE
Statutory Liability $1,000,000 $500
Employers Liability $1,000,000 $500
Employment Disputes $100,000 $5,000
WHAT'S NOT COVERED

As with all insurance there are exclusions for things that are not intended to be covered by the policy.  These are detailed in the policy wording.

Public Liability insurance does not cover you if the claim against you is for an alleged financial cost to someone only and there is no injury or damage to property.  For this you need Errors & Omissions Indemnity cover.

OTHER THINGS YOU SHOULD KNOW

An excess is payable for each claim.

POLICY TERMS & CONDITIONS
General & Broadform Liability Insurance for Builders & Tradespeople

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