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Posted By Daniel Pritchard
My company is setting some new standards for contractors Public Liability insurance, we are looking to set a minimum of 5 million, but obvious small companies may not have this cover, would it be ok to adjust policies to reflect company size and risk level of jobs to be done, is there a industry norm or any advise on this subject
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Posted By Ian-Edwards
Hi,
First important point is to check the terms of your own PL cover. There may be a requirement for your contractors to hold a certain level of cover, which you will be responsible for policing.
Otherwise, there is nothing to stop you tweaking the limit of cover requested. However, you should assess the likely maximum potential loss in monetary terms, to ensure that the contractor's cover limit would be adequate.
I should add that £5m is becoming more and more common as a standard limit under many PL policies, or most insurers will comfortably provide this level of cover as a primary layer. Excess PL insurance is also very cost-effective and not difficult at all for most contractors to come by. You've not said what they do - asbestos removal might be a bit more of a challenge, for example.
Hope this helps.
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Posted By Rodger Alan Ker
Be very careful before you think about "adjusting policies to reflect company size and risk level of jobs to be done".
A few years ago I was on the fringes of an incident where a small specialist sub-contractor accidentally contaminated an area of one floor of a large department store with asbestos.
The outcome was that more than £800K of stock was destroyed.
The complete floor of the store was closed to the public for six weeks while it was environmentally cleaned, cost £250K
The store's trading losses during this period were over £100K per week.
The last time that I stopped counting, this "simple incident" had cost more than £6M!
Think about the very worst that anyone could do to your business and what the cost might be.
You will probably want them to increase their Liability Insurance.
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Posted By James Denman
In my experience the smaller contractors seem to be more accepting of a £5 million PL than the larger ones.
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