Understanding £2 million public liability cover

How the wording fits the job

The wording matters because public liability cover has boundaries. The name of the policy does not tell you where every boundary sits.

The certificate is useful evidence for a customer, but the policy wording decides far more than the certificate shows.

The day-to-day exposure is easier to judge through examples. For this subject, look at: domestic and light commercial work; client requirements set at £2 million; and property damage that could spread beyond the immediate work. Each example can involve different facts and exclusions. Mention it if it forms part of the work you undertake.

Do not rely on memory if you can check: contract wording; policy definition of an occurrence; and any work at unusual or busy locations. Read the answer back as though you were checking somebody else’s form.

Set the certificate beside the full policy documents. The certificate confirms useful basics, but it cannot show every condition. An unexplained clause is a reason to ask a question, not to guess.

Where a claim might begin

The following examples are worth discussing if they occur in your work:

• Domestic and light commercial work
• Client requirements set at £2 million
• Property damage that could spread beyond the immediate work

The cause, timing and people involved can all change the outcome. Keep that in mind when reading the wording.

Consider “client requirements set at £2 million” first, using a contract or business record where one is available. Then look at “domestic and light commercial work” and record any uncertainty instead of hiding it in a rough answer.

Do not overlook “property damage that could spread beyond the immediate work”. If a form does not leave enough room to explain it, ask the provider how the information should be recorded.

Once the documents arrive, check that these details have not been replaced by a description that is narrower than the work.

What to check before starting the form

A hurried estimate can cause confusion later. Check:

• Contract wording
• Policy definition of an occurrence
• Any work at unusual or busy locations

Take “contract wording”, “policy definition of an occurrence” and “any work at unusual or busy locations” one at a time. Confirm what is known, make a careful estimate where necessary and avoid changing an answer merely to obtain a lower price.

The resulting documents also need a clear position on check the certificate before sending it. If they do not, ask while the quotation can still be changed.

Two reminders from this page are “do not rely on a verbal assurance alone” and “check the certificate before sending it”; keep them beside the documents when you check the quotation. If the policy takes a different approach to “contract wording”, ask about it before the cover is needed and retain any written reply.

If the provider asks for an estimate, make a fair one and note how you arrived at it.

Read beyond the policy summary

• Do not rely on a verbal assurance alone
• Check the certificate before sending it
• A limit is only useful if the activity is insured

Pay attention to instructions that use words such as “must” or “always”. Ask what happens if a condition cannot be followed on a particular job.

Check the awkward jobs too

Compare the trading name on invoices with the name shown on the quotation. The connection should be clear to a customer reading the certificate.

Price matters, of course, but a cheaper quotation is not useful if it leaves out the work that creates the risk.

If you later stop offering part of the service, keep records of the old work. The change may help at renewal, but it does not erase jobs already completed.

Before closing the file, return to this point: a limit is only useful if the activity is insured; check how this affects the jobs you accept and ask for clarification if the policy takes a different approach.