Public Liability Insurance
Dover District Council's Public Liability Insurance
Why You Need Public Liability Insurance
Information for other organisations
Public Liability policies indemnify an organisation for
compensation claim for property damage and/or injury made against
it by a third party.
Public Liability policies differ from property policies in that
any payment is made on the basis that the claimant has proved that
the organisation is legally liable for the accident. This may
necessitate the claimant taking the organisation to court to prove
negligence.
Most public liability policies also cover legal expenses
incurred whilst handling or defending the claim. This is important,
as many claims are speculative but still require legal
representation in order to defend.
Can the Council policy be extended to cover contractors or
other organisations or individuals?
No. The Council's policy can only cover the Council. There is no
cover for the liabilities of contractor's or other groups and the
policy cannot be extended to cover them.
The only 'extension' to the public liability policy can be for
volunteers who are assisting the Council in its business.
Within the policy there is a lengthy definition of a volunteer,
but briefly a volunteer is not paid to provide a service, is not
under contract and is assisting the Council in its regular business
or statutory duty.
There is no automatic extension under the policy for volunteers
and in order to extend the policy under the insurance
contract we need written or email notice that the policy needs
to be extended. This cannot be retrospective and therefore needs to
be prior to the period of extension.
Why do we ask for public liability insurance details?
As discussed above only the Council's liabilities are covered.
This does not mean that the Council either under statute (e.g.
Landlord Tenants Act, Occupiers Liability Act) or under case law
will not be found partly negligent for the actions of a contractor
but we request public liability insurance details for the following
reasons:
- Protection of the Public - If a contractor or other group is
not insured they will have no means of compensating the public
other than from their own finances. This may not be
sufficient.
- Protection of the Council - If a contractor or other group are
not insured then it may be impossible to pass the claim onto them.
This means the Council may end up paying the full cost any
compensation. Higher premiums as the result of poor claims
performance will be reflected in insurance recharges to individual
services.
- Quality Control - If a contractor or group appreciates its
risks, it will in the current litigious climate have arranged
public liability insurance. If it has failed to do so, then this
lack of foresight may also be reflected in the service
provided.
- Protection of the Contractor - Councils receive a large number
of claims. Contractors or other groups providing services for
councils are therefore likely to receive claims as well. The
insurers will not hesitate to redirect claims to contractor if they
consider them to be even partly responsible. Where court
proceedings are commenced contractors or other parties may be
joined as second defendants. Once again uninsured contractors will
pay for claims (and legal costs) from their own finances.
- Claims Handling - Obtaining details following an accident can
be difficult if the party involved is uncooperative. Being able to
contact their insurers directly does assist the Council in dealing
with the claim and limiting our financial exposure.
Who should provide public liability insurance details?
Any company including sub contractor, self-employed contractor
(including artists and performers), voluntary organisation,
charity, professional body, public authorities or partnership who
are engaged in the provision of a service, activity, event, or use
of Council land, facilities or the public highway.
Please refer to the Insurance Section if you are unsure of
anything.
Do we need to request details if we are merely providing
funding?
If the council is merely funding a project it should still ask
for confirmation from the funding recipient that they have arranged
appropriate insurance cover but does not need to pro-actively check
that they have insurance in place and obtain copies of documents
unless the project also involves use of council land, facilities or
the public highway.
The only other occasions when the council should pro-actively
check PL insurance details when acting as a grant awarding body
are:
- Request To Check - When the council is awarding funds on behalf
of another body that has specifically requested that we check
insurance details before awarding grants.
- Award Condition - When the funding has been provided entirely
or in part to enable the recipient to purchase insurance.
- Critical To The Project - If the insurance cover in general is
critical to the success of the project then the council as a
funding body should ask for insurance details including
confirmation of PL where appropriate. An example of this would be a
project that is heavily dependent on the recipient hiring
equipment, loaning property from other sources or hiring land or a
venue where PL cover will be requested.
What indemnity limit should be requested?
The recommended minimum limit of indemnity is £5 million. Some
contracts will require higher limits depending on the risk
exposure.
This limit may seem unrealistically high but requesting an
indemnity of £5 million has been considered best practise since
1988. There have also been substantial increases in compensation
payments in the last five years and indemnity limits today have to
be sufficient for claims that may not be settled for many years in
the future.
What is the procedure for collecting public liability
details?
Public liability insurance details are best requested at the
planning stage and the requirement should be included in any
written contracts or agreements made.
Confirmation of the existence of insurance cover or the
indemnity limit verbally is not sufficient. Confirmation of public
liability will come in two forms either a confirmation letter from
the insurer or broker or alternatively a copy of the schedule of
insurance. Most contractors who have previously dealt with local
authorities will have no problem in supplying details.
The details supplied can be confusing as there is no standard
wording or documents supplied by insurers. If you have any queries
please contact the Insurance Section.
Once collected, a copy should be retained on the file relating
to the activity and a copy sent to the Insurance Section. We
will file and archive these details in case they are needed at a
future date.
What objections can be expected?
Some contractors or groups may be reluctant to provide
insurance or extend their indemnity limits, especially as it may
result in costs to them. Experience has shown these to be some
of the usual objections given to the Council when asking for public
liability details:
- 'The Council has not previously asked for
details'
Possibly we should have but even if we have not that does not mean
we cannot now.
- 'I cannot obtain insurance'
Public
liability insurance can be obtained for most activities, although
they may need to speak to a specialist broker in some cases. In
fact the provision of insurance for specialist activities is now
easier than in the past with the growth of Internet listed
insurance companies and brokers.
Where there may be difficulties in obtaining cover is for one off
activities or one-day covers. Insurers and brokers are generally
only interested in annual policies. If, however, the contractor or
group are regularly involved in providing the service or activity
then an annual policy may be more appropriate anyway. In this case
we would also have the satisfaction of knowing that we have
provided a wider public service by ensuring a contractor is insured
in their future activities.
- 'The cost of insurance or the cost of increasing the
indemnity limit of the policy is too high'.
This
statement is often made before any enquiries as to cost have been
made.
Insurance cover is a business cost like any other and where the
contractor employs staff it is in fact a legal requirement.
Insurance premiums have increased but this only reflects the
increasing cost and likelihood of claims. Despite this many
contractors perceive the cost of insurance to be a lot higher than
it actually is.
Not arranging insurance cover can, however, be costly.
- 'No other local authority asks for public liability
cover or £5 million limit'.
Not true, but even if this was the case no other authority is going
to pay our liability claims.
Contact
The Insurance Section
Dover District Council
White Cliffs Business Park
Dover
Kent CT16 3PJ
Email: Insurancesection@dover.gov.uk
