Just received my annual reminder to pay the liability insurance premium, which I did and noticed the premium had risen yet again. Upon asking around I was surprised to hear that many are not renewing their policies at the moment and will do so ‘when the good times return’
The credit crunch is affecting many tradesmen and I know of several whose workload has fallen dramatically and in a bid to save money many are cutting back on advertising costs and are no longer paying the insurance premium. Whilst cutting back on advertising may indeed be prudent in these times, cutting back on the insurance most certainly isn’t
It can be argued that public liability insurance is not necessary and in this time of economic down turn it seems that some are more than willing to take the risk and drop their public liability cover with the aim of saving some money in the short run.
The first thing that needs to be explained is what exactly is public liability cover? The simple explanation is that having public liability cover will protect tradesmen from and damage that tradesmen may cause to a third party. So this means that for example if you a plumber working on a bathroom in a block of flats and you accidently drill through a mains water pipe and in the process flood most of the flats within the building, then you as the tradesman would be held responsible for the damages!!!!!!!
The smart tradesman with around 2 million liability insurance can make a simple phone call and everything should be covered. On the other hand the tradesman who decided to cancel the policy because of the credit crunch will have to find the money to repair the damage and in some cases, this could run into hundreds of thousands of pounds and I would imagine few banks would be prepared to lend such an amount, even if the tradesman had the collateral to offer as security. What then, possibly having to sell your main asset, your house and if that didn’t cover the costs then bankruptcy would loom unless you were fortunate to win the lottery.
High risk businesses such as plumbers and builders need public liability especially in these highly litigious times where many, otherwise decent folk and certainly the bloodthirsty ambulance chasing solicitors won’t miss an opportunity to make a fast buck.
These cautionary tales are very real possibilities meaning if reports in the last couple of days are to be believed then many tradesmen are leaving themselves liable for any damages that they or their business may cause.
If you feel that you may be paying too much for your public liability insurance then take advantage of one of the many price comparison website to find a cheaper quote. I must admit I checked and the difference for my policy was minimal, so I stayed with my present insurers.
Nothing is more likely to sink a business or financially cripple a tradesman more than a large claim which they are personally liable for.
Don’t take the risk, pay the premium.
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I wish to publicly state that I haven’t received any financial inducements to write this piece.
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Thanks for that sobering reminder, I still have mine in place. I also have employers liability too, can you remind us what that is? You put it so much better. Thanks
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