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Public and Employers Liability Insurance – a maze of complications?

Public and Employers Liability Insurance – a maze of complications?

Public Liability - why do I need it ?

Answer: In this day and age, you may have done nothing wrong, but someone alleges you have so in order to get some of your hard earned cash from you, these very nice claimants go to a solicitor, who will work for nothing to pursue you for compensation! Well when we say nothing, we mean, the solicitor doesn’t usually get money up front from his client to sue you, but if the solicitor is able to prove you are negligent, even partially negligent, then the solicitor has proved to a court that you are responsible, so the solicitor wins – and the solicitor gets paid for the work they’ve done.

Then again, there are times when you may cause damage to someone else’s property or even worse, cause injury to a member of the public. It’s not too hard to figure this one out, even though you may drive over someone’s property in order to collect a skip – it’s amazing how many times man hole covers or walls get damaged during this process. Even worse, it’s amazing how “shallow” some builders have laid gas, electricity or water pipes over personal property. Now an 18 Tonne Skip Loader can cause damage to those underground services. Essentially, your vehicle insurance policy may not cover such an incident as claims in respect of weight are often excluded – thank god you’ve got Public Liability as this will usually pick the tab up.

Employers Liability – why do I need it?

Answer: If you employ anyone – it’s a legal requirement to have this cover. There’s no running away from this one – if you employ people you have to have it!

Don’t get confused over what this cover does for employers though, it’s isn’t an insurance policy that an employer can call on to pay compensation to someone who’s injured following an incident, it’s an insurance policy that defends the employer against claims of negligence against them following an accident in the work place.

Conditions of Insurance Policies.

Almost certainly, you will find “Endorsements” in policy wording as follows:

  1. Make the hirer responsible for lighting the skip.
    This one helps to limit the skip hirer’s responsibility in respect of lighting the thing at night. Let’s face it, how can the owner of the skip be there during the hours of darkness to ensure it remains lit? He can’t, but if someone else is made responsible – i.e. the hirer, when that bad boy claim comes in because some buffoon has driven into it at night, your insurers are assisted in repudiating liability because someone else is technically liable for ensuring it was lit.
  2. Make the hirer responsible for having a permit on the skip.
    If someone hits the skip and there is no permit for it to be placed on the highway, whoever it is that holds you responsible will have a valid argument that the skip was not permitted to be on the highway. Although this doesn’t make it necessarily an open and shut case for the prosecution, again, it doesn’t help the owner of the skip if there’s no permit. Under the Highways Act, the owner of the skip may also be breaking the law by allowing it to be on the highway with no permit.
  3. Policy Excesses.
    This is the amount the policyholder pays towards claims made against him. It could be that the excess is for Property Damage only, in which case – you only pay the excess if you have been proven to cause damage to someone’s property. It most cases, you would not have to pay the excess for defence claims. So, if your insurers successfully defend you, then you will have won the case and your insurers pay for the defence costs while the skip company pays nothing!

Hints and Tips

Get your Skip Hire Terms and Conditions in order!

I cannot emphasise how important this is – no Terms and Conditions usually means – hard case to defend.

These terms and conditions usually include the following – but is not limited to; Making the hirer responsible for lighting, coning and arranging and renewing the skip permit. Declare clearly what can and can’t be put in a skip and declare, no fires in skips, no toxic or hazardous waste, no fridges, no asbestos etc. Another handy one is in respect of underground services. As above, underground services are sometimes not laid deep enough in the ground and driveways and paving slabs cannot always take the weight of a skip wagon – particularly an 18 tonner, so miraculously, when your wagon goes onto their land, the driveway starts to crumble, the drain cover cracks and the water works suddenly spring a leak. Protect yourself by advising the customer in your terms and conditions that if you are to drive onto their private land, you do so at their direction and risk and whilst on their private land, you are not liable for any damage to their property caused by the weight of your vehicle. To top all this off nicely, get a delivery note with your terms and conditions on the back and ask the hirer to read through your terms and conditions and get them to sign and date them before you deliver the skip. This helps your insurers to defend you in the event of a claim.

If you operate a Waste Transfer Station and have purchased insurance for a “Skip Hirer” or “Skip Hire”, it is likely that you are not insured for the activities of the waste transfer station. A skip hire company does not automatically have a waste transfer station. If your insurance document just states “skip hire” and there is no mention of the waste transfer station, chances are you aren’t covered for any claims or losses involving the operation of the transfer station. That’s also where the majority of the risk is, staff sorting waste – especially where excavators or loading shovels are involved.

Waste Transfer Station Operators

It is likely that if you own, manage or operate a waste transfer station, your insurance policy will be rated on what we call “wages and turnover”. Have you ever wondered why each year you are asked what your turnover was during the last 12 months and what you estimate it will be over the coming 12 months? This is because the insurers calculate the premium based on the turnover of the business and the wages paid to the employees. It makes sense that a business operating with just a handful of employees, pays a much lower premium than an operation of 50 or more staff. It’s all down to risk, more turnover and more employees equals extra exposure or likelihood of claim. If your turnover is going up, but this just because of the extra cost of tipping, tell your broker this, as then there is a good argument that you should not pay extra premium just because the turnover has increased. More turnover does not automatically mean more risk.

Be careful when projecting turnover and wages because if you project a turnover which is not achieved but you have paid a premium based on that projection – the insurers are not likely to return what is in effect, overpaid premium. Likewise, if you turnover more, or pay higher wages than projected, you may be asked for an additional premium at the end of the policy year, as some insurers will argue that they have been exposed to higher risk.

Pollution Cover

As a Skip Hire company, it is advisable to ensure that you have some element of pollution cover. Although you may think that there is a small chance of a pollution event occurring, clearing up a sudden and identifiable pollution event could be costly. One example of this was when a customer placed some asbestos tiles at the bottom of a skip. Of course, the skip hirer didn’t know they were there until his lorry was involved in an accident and out came the contents of the skip. Clearing up broken asbestos is a) expensive and b) very inconvenient which may lead to financial loss as roads get closed. As example, if a bus company cannot operate on a route because the clear up of asbestos incident is being carried out, that bus company may arguably lose money and the skip hirer could get a claim for this loss.

Public and Employers Liability Insurance is complicated and can be full of pit falls. Seek professional advice when buying insurance for your business.

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