Public liability insurance is a common requirement for many builders. Builders need a good policy that can protect their company because building projects can be risky. But public liability insurance is unlike any other style of coverage. With public liability insurance, there isn’t really a standard policy for all companies and situations. Due to the coverage differing from one insurance agency to another, you should make sure that you have a policy that best suits the needs of your company. For those of you working in the construction industry, here’s a few things you need to know about public liability insurance:

1. What is public liability insurance?

Public liability insurance protects a business from the public or customers in the event of personal injury or property damage as a result of your business activities. A public liability insurance policy compensates a third party for personal injury or property damage. Having a good public liability insurance policy is part of running a sound business in the construction industry.

2. When can you be held legally liable?

Liability means that you’ve been found to be at fault for any damage or injury. To be held as legally liable means that the injured party has a claim against your company for any damage caused in some way by your business.

3. Who are considered third parties?

Individuals who are considered to be third parties in a public liability insurance policy are those other than the owners or the business itself.

4. When is personal injury or property damage covered?

The public liability insurance policy for your business only pays compensation when a third party is injured or damaged by your business. It’s important to note that any disagreements arising from contracts or penalties aren’t covered by a public liability insurance policy. Also, please keep in mind that workplace health and safety breaches are also not covered in a public liability insurance policy.

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5. Does your public liability insurance policy cover all that you do?

The insured business in a public liability insurance policy needs to be defined well to ensure that the policy covers all the range of services that your company provides. When creating or updating your public liability insurance policy, take a moment to review the business description to ensure that it covers all that your company does. For example, if your policy defines you as a builder but you also do commercial hiring, then your business may not be fully covered and could require a separate insurance policy.

6. Is anything else covered?

Most basic public liability insurance policies cover legal defense costs and expenses that are incurred in defending insured claims and actions against your business for personal injury and property damage. The public liability insurance policy should also cover any liabilities to subcontractors and their workers or their actions. However, depending on the contract your business may be required to take out a separate public liability insurance policy for your subcontractors.

7. Should your business consider adding products liability insurance?

Products liability insurance, which is also referred to as general liability, is typically part of a public liability policy. This type of insurance coverage is for companies who supply products to the public or directly to their customers. This type of coverage is important because it protects your company from claims of personal injury or property damage caused by products sold or supplied through your business. Products liability insurance is designed to help protect your business by ensuring that if this happens, you don’t have to pay any legal or court costs.

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Does your construction company have public liability insurance? Do you feel that it’s essential for those working in the construction industry to have insurance? Please post your questions and share your stories with us by commenting below.