Public liability insurance policies have been available for many years. All commercial insurance companies offer their own policy wordings. These can range from a few dozen to over one hundred, depending on the breadth and depth of cover provided.
All policies will contain general and specific clauses. A general clause is one that relates to most types of insurance. A specific clause relates to the individual business that is insured.
A specific clause, on a plumbers insurance policy, would relate to the controls on the use of blowtorches and blowlamps.
A general clause relates to items such as Fraud and Dual Insurance
Fair Presentation of Risk
In August 2016, a new piece of legislation, The Insurance Act 2015, came in to force. This act is significant and clarified many areas of insurance law.
One of these is that policyholders (the purchasers of a business insurance policy) are now under a duty to make a ‘fair presentation of risk’ to their insurers. This applies when taking out a new policy or renewing an existing one.
This is a clarification and expansion on existing insurance and case law. The purchaser of insurance has always been under an obligation to disclose full details and facts about their insurance risk. However, an insured may not know every material fact. Nowadays, a policyholder needs to declare:-
- every material circumstance they know and
- that they ought to know
How does this affect public liability insurance?
When an insurer provides a public liability insurance quote, they will take into account many factors. One of the main ones, is the business activities. Public liability is concerned with damage to third party property or injury to third parties. Understandable, certain industries are more likely to cause damage or injury. A carpet fitter is less risk than a hot tar roofer. It is therefore very important that a business declares every business activity they may undertake.
If there is a claim, for a business activity that is not declared to their insurer, this could be turned down. It is appreciated that businesses diversify and undertake a wide and growing range of activities. At inception of the policy cover, it is important to declare all activities you currently undertake. If a slate and tile roofer undertakes very occasional hot roofing, this needs to be declared.
If a business takes out a new public liability insurance policy, this will include a note of their declared activities. If during the insurance year they undertake a wider range, this must be advised to insurers.
The best thing to do is to speak to your business insurance broker if you are in any doubt. You cannot over declare information to your broker. The more conversations you have with them, the better. If they feel the information you provide is not material to your insurer, they will let you know.