Now that insurance comparison websites have commoditised products, particularly motor insurance, there is a common perception that all public and employers liability products offered by insurance companies are also very much identical. Yes, the core covers are the same, but the terms, conditions and endorsements can vary significantly. Take plumbers liability insurance for example. For small firms with up to 15 employees, these are normally rated by insurers on what is known as a “per capita basis”. These policies are very cost effective, provide cheap liability insurance but are inflexible as the policyholder has to declare from the outset how many employees will be working for the firm and has to continually monitor large fluctuations throughout the policy period. Look for a product that includes some form of temporary employee cover, usually between 50 – 100 MAN days (i.e. 1 employee for 100 days, 2 employees for 50 days etc.), as this is a real benefit. Other pitfalls to look out for are :

• If there are restrictions on the use of heat – this includes heat guns, blow torches, oxyacetylene and any other naked flame. It is not uncommon for policies to place strict procedures around the site, for the policy to be effective in the event of a claim

• Height restrictions – most, but not all per capita policies restrict the height to 10 or 15 metres or a maximum of 4 storeys including the basement.

• Premises restrictions – again, these types of policies tend to restrict the premises to private dwellings, shops, offices, hotels and schools only

• The usage of PPE equipment, “toolbox talks” and health and safety obligations are always fulfilled under UK law.

For firms who want flexibility, wage-roll and turnover based products are available. Insurers rate each risk on its own merits, judging by the estimated splits on wage-roll/turnover at inception of the policy for the forthcoming year. Then, at the end of the policy period, the policyholder is required to complete a declaration giving the actual figures and the premium is then adjusted and, if the actual figures are higher, an additional premium is payable. This method has two distinct benefits for the policyholder. Firstly, it should be viewed as a form of credit! Secondly, in this competitive arena it is not unusual for insurers to “waive” the additional premium on the declared figures, if the policy is renewed for a further year.

The terms conditions and endorsements will fundamentally be the same as per capita products, but usually there is no height limit and there is only usually a hazardous locations restriction, such as railways, nuclear, airports etc…

Also remember that labour only subcontractors are also deemed employees for the purposes of insurance as there is still a legal obligation to cover these workers for employers liability.