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Factors that impact the cost of Public Liability Insurance for Contractors

Rhino Trade Insurance 15 May 2023

Why isn’t there a fixed cost for Public Liability Insurance for contractors? The simple answer is because every contractor is different and has different requirements when it comes to their Public Liability cover, so the cost varies to reflect this. 

Everyone's arrangement is unique. The cost of Public Liability Insurance cover might vary depending on your business' size, nature, history, and level of risk involved in your line of work. 

Let's spend five minutes exploring how the cost of Public Liability is calculated.

What aspects affect the cost of your insurance?

Nature of work

It's not just about how big your company is. Simply put, some industries are riskier than others. Even the smallest firms may require high levels of Public Liability Insurance due to the considerable hazards to people and property associated with the construction industry and other trades. 

Many contracts in the trade industry will include minimum Public Liability Insurance expectations. According to the Federation of Small Business, organisations must typically have at least £5 million in Public Liability Insurance in order to be awarded government contracts and local council work.  

Certain industries carry a significant risk because of how you interact with others, not just because of workplace safety hazards. A considerable Public Liability risk may exist simply because you work on sites that have members of the public and other third parties around your worksite. 

Depending on your business setup, you all have different ways of running your company. As a sole trader, partnership, or limited company, each type has different risks and hazards alongside the business profile. For instance, as a sole trader, your main worry may be that you frequently come into contact with the public, whereas a limited company may consider the risks of having scale and working on various jobs at any given moment. 

To get the best idea and prepare for your quote, you may want to consider what claims could come your way due to your business practice and think of what the worst-case scenario would be. 

Claims history

Mistakes can happen even when you try your best to keep your company in compliance with health and safety regulations. It may be a sign of your present risk profile if you've had issues in the past with visitor injuries or property damage. Past claims could affect your policy price, especially if compensation was paid out. 

Get a quick and easy quote from Rhino Trade Insurance here.

Business size

Larger companies may be more exposed to Public Liability risks due to a bigger workload. This can affect how much insurance they may require. There are many reasons for this, including the fact that larger-scale operations increase the risk exposure and perhaps create more conditions where things can go wrong. 

For example, if you run a large building company with several locations, there is more chance that individuals and third parties will contact your business. Depending on other variables, even the smallest trade businesses may be exposed to considerable Public Liability risks, and that's why it's worth exploring your cover options before conducting any work on-site.

Coverage limits

Each trade business must decide on the amount of its Public Liability Insurance cover limit - this is the highest amount an insurance provider would pay out in compensation if a lawsuit or claim against you was successful. You may determine how much you require and use that amount as a ceiling - this figure will serve as an idea of the final cost.

Some clients might request that you have a certain amount of insurance coverage, such as £5 million or £10 million. As mentioned, this can be the case with councils or trade associations. 

The higher the cover limit of your Public Liability Insurance, the more your premium payments will be.

Ways to improve your risk management

Various tradesmen and women, including Plasterers, Decorators, Electricians, and Bricklayers, may all work on the same job site. A contractor may find it challenging to manage this because there are various different dangers involved in the numerous professions working together on one site.

As a result, you must have a risk assessment in place for the whole site, and be aware of certain areas that could endanger your company and have the right training and management in place.

Safety training and risk management

Construction sites can be among the riskiest locations to work; therefore, it is crucial to understand your obligations in terms of health and safety. Risks can consist of:

  • Moving, handling and lifting heavy, awkward objects
  • Working at height and using machinery that could be dangerous
  • Power tool usage
  • Exposure to hazardous dust and particles
  • Working around other tradespeople, foundations and uneven ground

The safety of the job and, consequently, the capacity to complete the required work can be strongly impacted by the tradesperson's conditions. To ensure the safety of your company, employees, clients, and others, it is always essential to undertake a thorough risk assessment before beginning a project. This will cover how to mitigate particular hazards and what to do in the event of an accident. 

Read our blog here to learn more about risk assessments and how to act in a crisis on-site.

Proper record-keeping and documentation

It's crucial for self-employed tradespeople and business owners to be current with their health and safety training. Having the necessary information and training in this area will assist you and your employees in better understanding workplace safety policies and how you may adapt to meet present industry standards. 

Being familiar with potential hazards and understanding what to do in case of an accident or injury is a great asset. For instance, various factors might have specific impacts on the human body; thus, you might suffer different symptoms in the colder months than on a hot summer day, especially when it's at its peak.  

It makes smart business sense, as you can avoid costly accidents by keeping an eye out for health and safety issues before they arise.  

Choosing the right insurer

Skipping Public Liability Insurance simply isn’t an option for a smart tradesperson. Accidents still occur even when effective health and safety protocols are in place at work. However, legal fees and compensation payouts can be high if a company is found to be at fault, so having a good level of cover in place will ensure your business survives should it encounter claims. 

Public Liability Insurance covers your company if you damage a client's property, hurt a customer or a member of the public, or even accidentally kill someone as a result of the work you are doing. Selecting the right insurer is key to ensuring you have a smooth process if any of these scenarios ever happen to you. 

Businesses can choose from a variety of cover choices from Rhino, and you may opt for Public Liability for £1 million, £2 million, or £5 million. 

Why Talk to Rhino about your Public Liability cover

Rhino Trade Insurance is a one-stop shop for ensuring you have the right protection in place. Your best hope in a sector rife with risks is to protect your company with a robust insurance plan. Planning for hazards is crucial, but insurance will always be your safety net if something goes wrong on the job site. 

The Rhino team has extensive trade experience. Simple cover options, including Public Liability Insurance, Tool Insurance, Employers' Liability Insurance, and more, have been developed by our policy experts. 

Whether you have questions or want to take out cover now, call us at 0116 243 7904 or visit our website to get a quick price in just a few seconds. 


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