Public liability insurance for tenders and contracts

What the policy needs to reflect

The practical test is simple enough: could the policy provider recognise the job from the description you supplied? If not, the description may be too vague.

The schedule, endorsements and main wording work together. Reading only the certificate can leave out the conditions and exclusions that affect a claim.

The points most likely to change the insurance answer include: required limits above your present cover; joint names or principal clauses; and liability accepted under contract. A familiar accident can still fall outside a policy. Use these examples to check what has actually been quoted.

A few minutes with your diary, invoices and contracts should help you confirm: every insurance schedule in the tender; project duration and renewal points; and subcontractor insurance rules. Keep a copy of the completed answers with the documents that follow.

Read the schedule and endorsements when they arrive. They may contain restrictions that do not appear on the certificate. Keep written answers with the quotation so they can be found later.

How the problem can arise

A quotation should take account of points such as these:

• Required limits above your present cover
• Joint names or principal clauses
• Liability accepted under contract

They are examples rather than promises of cover. The insurer will still examine what happened and what the policy says.

Take “required limits above your present cover” first. Where would it happen, who would be nearby and what property could be affected? The answer may reveal a site, method or customer type that has not appeared elsewhere in the quotation.

Next consider “liability accepted under contract”. Ask what could stop the damage becoming worse and what evidence would still be available after the site had been cleared.

You are not trying to predict every claim. The point is to see whether the proposed description bears a sensible resemblance to the work.

Information the provider may need

Have the following information ready before you begin:

• Every insurance schedule in the tender
• Project duration and renewal points
• Subcontractor insurance rules

“every insurance schedule in the tender”, “project duration and renewal points” and “subcontractor insurance rules” may come from different documents. Bring them together before requesting a quotation so that dates, activities and contractual requirements do not conflict.

If the form offers only broad categories, choose the closest honest description and use any available notes box to explain the difference.

Two reminders from this page are “do not tick “compliant” without checking” and “keep clarifications with the contract file”; keep them beside the documents when you check the quotation. If the policy takes a different approach to “every insurance schedule in the tender”, ask about it before the cover is needed and retain any written reply.

Look for mistakes as soon as the documents arrive, especially in the business name and activity description.

Wording to read before buying

• Do not tick “compliant” without checking
• Keep clarifications with the contract file
• Allow time for document changes

An endorsement can change the standard wording. Check every endorsement listed on the schedule.

Finish with the paperwork

Look back over the jobs completed during the past twelve months. Include the occasional work, not just the service that brings in most of the turnover.

Contracts sometimes ask for more than a limit. Read the whole insurance clause and query anything you do not understand.

Keep a simple note of later changes: a new service, different premises, extra staff or a larger contract. Ask whether the policy record needs updating rather than assuming the change can wait.

A last check should cover: allow time for document changes; check how this affects the jobs you accept and ask for clarification if the policy takes a different approach.