Public Liability Insurance

Offshore liability

10/04/2012 in Employers Liability Insurance, Public Liability Insurance

Over the last few years it has been common practice for offshore contactors to set up limited liability companies. In the majority these are one man band operations where the owner is the sole employee.

Oil companies will typically be looking for these companies to carry public liability, employer’s liability and in some cases professional indemnity insurance.

We are often asked the question “Is employers’ liability really necessary?” The situation is that if the providing these companies have just one director and no other direct employees or sub-contractors there is no legal requirement for employer’s liability insurance.

As employer’s liability can be a costly for offshore work there maybe scope to save on premium by excluding employer’s liability from the insurance programme.

Macbeth have access to a number of facilities are for offshore Liability is aimed at contractors working at oil refineries, wind-farms, offshore rigs and the like.

For further information in respect of offshore liability insurance, contact David Mann on 0118 9165 486, or complete one off our enquiry forms.

How does public and employers liability insurance work?

13/02/2012 in Employers Liability Insurance, Public Liability Insurance

Public liability insurance offers financial protection against claims from members of the public for bodily injury or property damage, providing that the policyholder is legally liable.

Employer’s liability provides financial protection against claims from employees for bodily injury, providing the employer is legally liable.

There are two ways that Insurers calculate the premium for these policies. For smaller businesses the insurers calculate the premium based on the number of employees, this is called “per capita” rating.

For larger companies the premiums tend to be rated on the estimated turnover and wage roll. Estimates are provided at the outset of the insurance and insurers charge a deposit premium based on these figures. At the end of the period of insurance the insurers will ask for a declaration of wages and turnover and then adjust the premium accordingly.

Other factors in determining the premium will be the public liability indemnity limit. The minimum indemnity limit is normally £1,000,000. It is commonplace for indemnity limits to be £2,000,000 or £5,000,000. Public liability for scaffolders and other higher risk occupations can require indemnity limits of £10.000,000, especially if work is being carried out for local authorities.

There are also various specialist insurance schemes for industry sectors. For example there are specialist insurance policies for the cleaning industry and for the security sector.

For further advice on liability insurance, please contact Tony Gibbs on 01189 165 485 or complete one of our enquiry forms.

Public liability Insurance – A common misconception that can lead to disappointment

21/12/2011 in Public Liability Insurance

Public liability insurance provides an indemnity for loss or damage to third party property and for accidental bodily injury to third parties, where the policyholder is legally liable.

Some policyholders however may not be aware that most public liability policies contain an exclusion relating to property that is in the care, custody or control of the policyholder.

In view of this, it’s important that, if in the course of your business you are taking responsibility for third party property, that you ensure adequate arrangements are made. This could involve the policyholder extending a material damage policy to insure “goods in trust” or letting the customer know that you are not taking responsibility for insurance, so that they can make their own insurance arrangements.

If you would like further advice on public liability insurance please contact Tony Gibbs on 0118 9452944, or complete one of our enquiry forms.

What is Airside liability Insurance?

01/08/2011 in Public Liability Insurance

“Airside” generally refers to an area on an airport that has restricted access. This will be the aprons, taxiways and runways as well as the area past the security gates in terminal buildings.

Most standard public liability policies will contain an exclusion relating to high risk locations, airport and aerodromes are on the list of excluded premises. Some insurers may consider providing liability cover at airports for an additional premium but they are unlikely to provide an indemnity limit of more than £5 million.

As companies or individuals that are working airside will inevitably require a higher level of public liability cover, airside liability insurance can be arranged as a separate policy, either to top up an existing insurance, or to provide the primary cover. It is not uncommon to see indemnity limits in excess of £50 million.

For more information regarding airside liability insurance, contact Tony Gibbs on 0118 9452944 or complete one of our enquiry forms.

Sub-contractors – to insure or not to insure?

08/10/2010 in Insurance Industry News, Public Liability Insurance

Sub-contractors – to insure or not to insure?

Determining whether you need to insure sub-contractors that you may use is often a complicated area. Our guide below will help you assess if you need to cover your sub-contractors but if you need further advice, please call us on 0118 945 2944.

Bona-fide sub-contractors (BFSC)

Bona-fide sub-contractors are generally deemed to be contractors who work without direction from the insured, hold their own insurance and usually provide their own materials and tools.

• As long as they are not working under your direction, have their own legal liabilities and insure for themselves, there is no need to include them in the count of employees for premium calculation purposes (Employer’s or Public Liability).

• Insurers are insuring your legal liabilities. If the act of a bona-fide sub-contractor produces a legal liability against you, then that is covered.

• What insurers will not do is extend the policy to include the legal liabilities of the bona-fide sub-contractor – they should have their own Public Liability insurance in their own name. It should be noted that it is a condition of the insurance that you check that bona-fide sub-contractors have their own Public Liability cover to at least the same limit of indemnity as you before they appoint them.

Labour only sub-contractors (LOSC)

Labour only sub-contractors should be treated as employees for the purposes of cover under the insurance. Generally they work under the direction of the Insured and do not provide their own material or tools.

Determining BFSC or LOSC status

Whilst it is difficult to provide an accurate definition, it is important to try and correctly determine the status of subcontractors to ensure that the cover provided by the policy is adequate.

As a general guide as to whether a worker is a LOSC or BFSC; if the answer is ‘Yes’ to all or most of the following questions, then the worker is probably a LOSC:

• Are they paid by the hour, week, or month?

• Can they receive overtime pay or bonus payment?

• Do they only supply their own small hand tools?

• Do they always have to do the work themselves?

• Can the principal contractor tell them at any time what to do, where to carry out the work or when and how to do it?

• Can they work a set amount of hours?

• Can the principal contractor move them from task to task?

If the answer is ‘Yes’ to all or most of the following questions, then the worker is probably a BFSC:

• Do they agree to do a job for a fixed price regardless of how long the job may take?

• Do they have a contract of service as opposed to a contract of employment?

• Within an overall deadline, are they able to decide what work to do, how and when to do the work and where to provide the services?

• Do they regularly work for a number of different people other than the principal?

• Do they have to correct unsatisfactory work in their own time and at their own expense?

• Do they hold their own Public Liability insurance in their own name?

• Do they pay the cost of all materials or supplies required for the work without being reimbursed? (excluding minor items and consumables).

• Can they hire someone to do the work or engage helpers at their own expense?

• Do they risk their own money e.g. if they bid for a job and the bid is too low they have to bear the additional cost themselves?

• Do they provide or hire in the main items of equipment they need to do their job, not just the small tools that many employees provide for themselves?

Public Liability Fact Sheet

08/10/2010 in Factsheet, Public Liability Insurance

Although Public Liability insurance is voluntary for most businesses, the compensation and blame culture that has swept the UK makes it almost impossible to trade without such vital cover. Businesses that choose not to purchase this cover are risking both financial disaster and the future of their company.

Public Liability insurance covers you against any third party claims made against your business. For example, if you were held legally liable for personal injury, or for damage caused to property. The insurance will also cover you for any legal costs associated with defending claims against your business.

Even if you work from home you will usually still need Public Liability insurance. If clients often visit you at your home office, this type of policy will cover you if they injure themselves while on your premises. The policy will also usually provide cover for any work you carry out away from your home.

The level of premium will depend on the size of your business. For the smaller company, it will be calculated on the number of people working in the business and for the larger company, it will be calculated on your turnover and wage roll. The problem is working out what level of protection you think you need. The key is not to underestimate. The traditional limit of £1 million may sound like a lot but if you find yourself facing a large claim or a claim from more than one third party, the compensation awards and the legal fees involved could easily exceed such a limit. In more recent years, the majority of businesses, particularly those involved in a manual occupation will purchase limits of £2 million or £5 million.

For contractors, there is often confusion regarding the employment of sub-contractors.

There are two types of sub-contractor:

• Bona Fide – regarded as a company in their own right. They will often provide materials & equipment and will usually have their own insurance cover in place. They will not work under the direction or control of the principal contractor. This type of contractor does not need to be insured under the policy.

Example – ABC Building Services (principal contractor) employs XYZ Roofing Services (bona fide) to build and install a new roof on a newly built house. XYZ carry their own insurance and do not use any equipment or materials supplied by ABC. They do not work under the direction or control of ABC and do not need to be insured under the policy.

• Labour Only – generally regarded as an employee and solely provides labour and skills to the principal contractor. They will not provide materials or have their own insurance. They will generally work under the direction and control of the principal contractor. This type of contractor must be insured under the policy.

Example – ABC Building Services (principal contractor) employ Mr Smith (labour only) to work on a large building project. Mr Smith is self-employed but does not have his own insurance. He works for ABC, ultimately under their direction and control. ABC supply, both the materials and some equipment/tools for Mr Smith to carry out his duties. Mr Smith is ABC’s responsibility and must be insured under the policy.

Products Liability

Although not compulsory, this is an important area of cover which is often provided in-conjunction with a Public Liability policy.

If you manufacture or supply goods, there’s always the possibility that your product could cause injury to a third party or damage their property. A small defect could lead to massive claims, so this cover is vitally important for any business in a product supply chain, particularly manufacturers.

Look for a policy that guards you against safety claims, manufacturing quality, spoilage and indemnity costs (medical bills and so on). And remember Products Liability is designed to cover you against unforeseen circumstances, if you simply make an inferior product or supply bad services then you’re not going to be able to make a claim.

Peter Knifton, Managing Director – Bryanston Research Ltd

08/10/2010 in Public Liability Insurance, Testimonial

I have been using Macbeth for insurance since its formation in 1992.

For me the benefit is that I can talk to people who know me, know my needs, & will come back with sensible ideas and realistic prices.

Why should I bother with call centres and telephone menus when I can have real people instead?

I have recommended Macbeth to colleagues, and will continue to do so.

Peter Knifton, Managing Director
Bryanston Research Ltd

Product Recall

30/07/2009 in Public Liability Insurance

In 2006 Cadbury’s recalled one million chocolate bars as a result of a contamination at its Marlbrook plant. In spite of all its rigorous quality checking, small traces of salmonella entered the manufacturing and processing chain.

The contamination was caused by a leaking pipe at Cadbury’s Malbrook plant, near Leominster, Herefordshire. The leak was discovered in January 2006 and subsequently samples were sent to an independent laboratory for analysis and a stem of salmonella was identified. As a result, Cadbury’s had no alternative but to recall all the bars suspected of contamination.

This cost Cadbury’s millions of pounds. The frequency of recalled goods is increasing and it now seems most editions of newspapers carry a product recall notice. This is not because quality standards have fallen but because safety standards, consumer demands and controls have increased.

If a business becomes aware of or suspects its product has a defect that could cause harm, it has no choice but to recall it at great cost. No insurer would protect a business if the goods were knowingly left on the market and then caused injury or damage. Directors may be held personally responsible if they allow unsafe products to remain on the market and businesses face possible prosecution, or fines, from regulators as a result.

A defect may be caused because of a faulty component, raw materials not up to specification or an ingredient that is contaminated before delivery. In these cases the supplier, manufacturer or importer may be liable for all the recall costs and be subject to claims for damages or loss of reputation. This can be a frightening prospect for already squeezed suppliers.
All these issues have insurance implications. Cover may be available against the cost of a product recall and this should be seriously considered by businesses in the retail consumer chain and investigated by others involved in the supply of volume goods where recall costs could be high. The number of insurers prepared to provide cover is low but sensible businesses, with our help, should weigh up the cost against the risk and then make a business decision.

Are you covered for Product Liability?

If you are in the supplier chain in any sector and are concerned if you provide a faulty component, product or ingredient, there is a possibility that your Product Liability policy could offer some protection. However, this is a complicated issue and if you are concerned you should contact us as soon as possible. We can assess the situation and make suitable recommendations as to the level of cover required and whether the limits already in place are adequate for any potential exposure.

Insurance can play an important role in ensuring that a sour taste does not remain too long, so if you have any concerns, are in any doubt about your existing cover, or require cover, please do not hesitate to get in touch.