What Does Public Liability Insurance Cover for Tradesmen?

What does a public liability policy actually pay out for?

It pays damages for third-party injury and property damage, the claimant’s legal costs, and your own defence costs. Those four heads of loss make up almost every settlement.

Damages for injury

Injury damages are set by the courts using established guidelines, not by your insurer’s goodwill. They cover pain and suffering plus the financial consequences of being hurt.

That second part is what makes injury claims expensive. Lost earnings, care costs and adaptations to a home can dwarf the award for the injury itself.

The cost of putting property right

Property damage is paid on the cost of repair or replacement, plus any loss that flows from it. A flooded shop is not just a floor, it is a fortnight of closed trading.

Landlords and managing agents bring a lot of these claims, which is why property owners’ liability sits on the other side of the same incident.

Legal and claimant costs

Losing a claim means paying the other side’s solicitors as well as your own. On a modest injury claim, the combined legal bill can rival the damages.

Your policy funds both. That is the part uninsured trades never budget for.

What injury claims does it cover?

Any injury to someone outside your business that your work causes. Trips, falls, falling objects, burns, electric shocks and dust exposure all sit inside the cover.

Trips, trailing leads and wet floors

The most common trade claim is also the least dramatic. Somebody catches a foot on a cable, a toolbox or a lifted floorboard and goes down hard.

It happens in occupied homes more than on sites. A plasterer working around a family with young children is running that risk all day.

Falling objects and work at height

Anything dropped from height turns into a serious injury claim. A roofer who loses a slate over a pavement has no defence worth arguing.

The same applies to branches, ladders and buckets. A tree surgeon dropping timber near a footpath and a window cleaner working over an entrance carry near-identical exposure.

Injuries that happen after you leave

Cover follows the incident, not the invoice. A handrail that comes away from the wall six months after you fitted it is still your liability.

This is why public liability is written on an occurrence basis. The policy live on the day of the accident is the one that answers.

What property damage does it cover?

Damage to anything you do not own, caused by your work. That includes the room you are working in, the property next door and anything your finished work goes on to damage.

The room you are standing in

Client property is where most damage claims start. A carpenter catching a worktop with a circular saw has caused several thousand pounds of damage in a second.

Flooring, worktops, glazing and decorated surfaces are the usual casualties. None of them are cheap to make good in an occupied house.

Water damage and the property next door

Water is the single most expensive thing a tradesman can release. It travels downwards through ceilings, floors and, in flats, into somebody else’s home.

A joint left open overnight in a first-floor bathroom can produce a five-figure bill across two properties. The job itself might have been worth £300.

Damage caused by your completed work

A leak from a fitting you installed, a fire from a connection you made, a wall that moves because of a beam you cut. All of that damage falls to the policy.

The fitting or the connection itself does not. That distinction runs through the whole of what a tradesman policy covers and it is worth getting straight before you need it.

Are legal costs covered on top of the limit?

It depends on the wording. Some policies pay defence costs in addition to the indemnity limit, others pay them within it, which quietly reduces the compensation available.

Costs in addition versus costs inclusive

Costs in addition means a £2 million limit stays £2 million even after £150,000 of legal fees. Costs inclusive means the fees come out of the same pot.

On a £2 million public liability policy that difference only shows up on a large claim, which is exactly when you cannot afford it.

What defence costs actually buy

Defence costs pay for solicitors, barristers and the expert witnesses who decide technical disputes. In a trade claim the expert is often the person who determines the outcome.

They are paid whether the claim succeeds or fails. An unfounded claim still has to be answered, and answering it properly is not cheap.

What does public liability insurance not cover?

It excludes your own employees, your own property, deliberate acts, liability you took on by contract, professional advice and gradual pollution. Each of those gaps has a different policy sitting behind it.

Injuries to your own staff

Employee injury belongs to employers’ liability, which the Employers’ Liability (Compulsory Insurance) Act 1969 makes compulsory from your first hire.

The legal minimum is £5 million and the penalty for going without is £2,500 a day. HSE guidance sets out the narrow exemptions, including a sole employee who owns half the share capital.

Your own tools, van and materials

Nothing you own is third-party property. Stolen tools, a damaged van and materials ruined on site are all outside the policy.

Tools need their own section and vehicles need van insurance. Incidents involving a vehicle on a public road belong to the motor policy, not to liability cover.

Deliberate and reckless damage

Insurance answers accidents. Damage you caused on purpose, or by ignoring an obvious risk you had been warned about, is not an accident.

Working without the permits or precautions the policy requires falls into the same category. The insurer treats a breached condition as a decision you made.

Liability you signed up to

Standard wordings cover the liability the law puts on you, not extra liability you accepted in a contract. Hold-harmless clauses and indemnity clauses often go beyond what the policy will follow.

Send any onerous contract to your broker before signing. A clause that makes you responsible without fault can leave you uninsured on the very job you signed it for.

Gradual pollution and clean-up bills

Public liability responds to a sudden, identifiable, unintended and unexpected incident. Pollution that seeps out slowly, and remediation of your own site, sit outside it.

In Bartoline v RSA in 2006 a £770,000 Environment Agency clean-up bill was refused because it was a statutory debt rather than damages. Specific extensions exist to close that gap.

Does it cover faulty workmanship?

It covers the damage your faulty work causes to other property, never the cost of putting the work itself right. That single line explains most declined trade claims.

The damage yes, the rework no

Fit a radiator valve badly and the ceiling below comes down. The ceiling is a covered loss and the valve is your problem.

Insurers draw the line there for a reason. Covering rework would turn a liability policy into a guarantee on your quality of work.

Where contract works picks up

On a build, the part-finished job is not yet the client’s property, so public liability does not reach it. Contract works cover does.

Fire, flood, storm and theft on a half-built extension all land there. Anyone quoting structural work should read what roofers and builders need to hold before the first site visit.

Financial loss with no physical damage

If your mistake costs a client money but breaks nothing, public liability has no trigger. Professional indemnity answers that instead.

Specifying the wrong system, giving the wrong advice or missing a survey defect all sit there. The boundary between professional indemnity and public liability is drawn on whether anything physical was harmed.

Are subcontractors and casual help covered?

Only if your policy says so. Bona fide subcontractors normally carry their own cover, while labour-only help is usually treated as your employee for insurance purposes.

Bona fide versus labour-only

A bona fide subcontractor brings their own tools, their own methods and their own insurance. A labour-only subcontractor turns up and works to your instructions.

The second one needs employers’ liability behind them, whatever the invoice says. Getting that classification wrong is how a trade business ends up uninsured without knowing it.

Checking a subcontractor’s own cover

Ask for the certificate, check the dates and check the trade description matches the work they are doing for you. A roofer insured for guttering is not insured for a strip and re-tile.

Keep a copy on file for every job. If you run a limited company public liability policy, your insurer will ask for those records the moment a claim involves a subcontractor.

Which activities are excluded unless you declare them?

Hot works, work at height, work below ground, asbestos contact and anything outside your stated trade. Each is either excluded outright or conditioned until you declare it.

Hot works and fire conditions

Any work involving flame, grinding or hot air usually carries a permit condition. Insurer hot work conditions call for a continuous fire watch for at least an hour after work stops.

They then require checks at intervals of no more than twenty minutes for a further hour, combustible material cleared within ten metres, and work finished at least two hours before the end of the shift.

Height and depth limits

Many trade policies cap the height you can work at, often at two or three storeys. Above that, cover either stops or is priced separately.

Excavation depth is treated the same way. Declare both honestly, because the limit is checked after an accident rather than before.

Asbestos contact

Asbestos is excluded on most standard trade wordings. HSE guidance sets out the duty to manage it and the licensing rules for higher-risk work.

Disturbing it accidentally in a pre-2000 building is a live risk for almost every trade. Tell your insurer if your work brings you anywhere near it.

What extensions widen the cover?

Financial loss, products liability, contract works and environmental extensions are the four that matter most to trades. Each closes a specific hole in the standard wording.

Financial loss extensions

These pay a limited amount for pure financial loss where nothing was physically damaged. Limits are usually modest, often a few tens of thousands of pounds.

They are not a substitute for professional indemnity. Treat them as a small safety net rather than real advice cover.

Products liability

Products liability answers claims about goods you supplied rather than work you carried out. If you fit materials you also sell, you need it.

Watch the wording on the limit. Products cover is often written in the aggregate for the year, while public liability is written for any one occurrence.

Environmental extensions

A Bartoline extension responds to statutory clean-up costs that ordinary damages wording will not reach. Groundworkers, fuel handlers and anyone near a watercourse should ask for it.

The 2015 environmental damage regulations put strict liability on certain operators and an immediate duty to notify the regulator. Insurance does not remove that duty.