Frequently Asked Questions

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FAQs

What is Business Insurance?

Business insurance is designed to protect businesses when they suffer losses while carrying out their usual activities, and is particularly important if a business finds itself facing a claim for compensation. Typical business insurance cover may include employers' liability insurance, public liability insurance, and professional indemnity insurance.

What is Public Liability Insurance?

Public liability insurance is designed to protect your business if a client or member of the public claims they have been injured or their property damaged because of your business activities. It covers the cost of legal defence, compensation, damages, and any legal expenses incurred by third parties in making a successful legal claim against you. For example, if wiring you installed later caused a fire that damaged a building, and it was then deemed that you were negligent, your contractors public liability insurance would pay the costs and compensation – up to the maximum level of cover (or limit of indemnity) indicated on your policy.

Do I Need Public Liability Insurance?

Public safety and the positive reputation of contractors and tradespeople are an important part of NICEIC registration. If you are a registered contractor, you need a minimum of £2 million cover to meet registration obligations. This amount is included in our electrical contractors insurance cover with Covéa as standard. However, we recommend you check any contracts you undertake and seek specialist insurance advice if more cover is needed. There's no requirement to have public liability insurance in place from a legal perspective, but it's certainly an essential insurance to consider as a responsible contractor. Also, you could be left out of pocket if a claim is made against you and you don't have adequate cover.

How Much Public Liability Insurance do I Need?

The level of protection you take out depends on the type of risks you face. It's an individual decision based on the nature of each business – though it's worth finding out what level of cover potential clients expect you to have. There may be a minimum requirement of cover required depending on the nature of the job or your electrical contractor registration – for example, if it's a commercial contract for a council, they may require a higher level of cover than a domestic job. If you are an NICEIC registered contractor, you need a minimum of £2 million worth of public liability insurance is required in place to meet the obligations; therefore, we offer public liability cover ranging from £2 million up to £10 million, depending on the trade and insurer.

What is the Difference Between Public Liability and Employers Liability?

They are very different policies. In essence, employers liability protects against death or injury to employees whilst at work. In contrast, public liability protects against death or injury and damage to property, affecting everyone apart from employees, and which comes about as a result of your work.

What is Employers Liability Insurance?

Employers liability insurance protects you in the event you are held legally liable for accidental death or injury to your employees - at work or in connection with your business. It also covers legal costs incurred by employees in making successful legal claims against you.

Do I Need Employers Liability Insurance?

There are some exceptions, but if your business has at least one employee, then the likelihood is you will need employers liability insurance – remember too that temporary workers, "labour-only" subcontractors, volunteers and people doing work experience all count as employees for the purposes of insurance. The Employers' Liability (Compulsory Insurance) Regulations 1998 made employers liability insurance cover of at least £5 million compulsory for any individual or company with employees. The exceptions include: - Limited companies where the owner is the only employee and owns 50% or more of the issued shares. - Businesses that are not limited companies and only employ close family members.

What is an Employee?

An employee is someone who works part-time or full-time under an employment contract. However, remember that when it comes to employers liability insurance, you may need cover for people you don't consider to be employees – like volunteers, 'labour-only' subcontractors, temporary staff and students on work experience.

Do I Need Employers Liability Insurance if I Use Temporary Workers?

Yes, employers liability insurance requirement extends to businesses using temporary or casual workers that are employed on a short-term contract and ad-hoc basis – whether they are clerical or manual workers.

Do I Need Employers Liability Insurance if I Use Sub-contractors?

That depends on whether you use 'labour-only' or what's known as 'Bona Fide' sub-contractors. Labour only subcontractors work under your direction and typically use tools and materials you provide ‒ and are paid by you or through an employment agency. Bona Fide subcontractors, on the other hand, are paid by the main contractor but work under their own direction and provide their materials and tools. You'll need employers liability insurance if you use labour-only sub-contractors – but Bona Fide sub-contractors are not treated as employees for insurance purposes.

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