Does Public Liability Cover Poor Work?

Public liability insurance is a type of cover designed to shield businesses from financial loss if found responsible for accidental injury or property damage. It covers a range of things, but does public liability cover poor work?

What public liability insurance does not cover

Unfortunately, public liability insurance does not cover poor workmanship itself, neither is it a guarantee of work. If you perform a job incorrectly, its known as a trade risk, and the cost of redoing the work is not covered by this kind of insurance.

Consequences of poor work covered

While public liability insurance does not cover the cost of redoing poor workmanship, it may cover accidental damages and injuries that arise as a consequence of it.

This means that although the expense of correcting the faulty work is not insured, any accidental harm or property damage caused by the substandard work can be claimed.

Here’s an example scenario:

• A plumber incorrectly installs a pipe in a commercial building.
• The poor installation itself is not covered by public liability insurance.
• However, a few days later the pipe bursts, flooding the building and damaging expensive equipment.
• The cost of repairing the initial plumbing error is not covered. What was the cause of flood? If it was due to negligent workmanship by you or your employees then the resulting damage to the surrounding property and equipment would be covered (as long as you have complied with your insurance policy terms). It is likely that you will be responsible for the first amount of any property damage claim. This is known as the policy excess, and will vary from policy to policy, typically about £250.

This distinction illustrates how public liability insurance does not cover the cost of fixing the substandard work. However, it does cover the financial impact of any accidents or damage caused by that poor work, provided that they occur during the period of your insurance cover.

Warranty insurance vs. public liability insurance

While public liability cannot provide cover for faulty workmanship, there is a type of insurance that can.

Warranty insurance, also known as workmanship warranty insurance, is a specialist insurance and can provide coverage for the cost of correcting defective work. If a product or service fails due to substandard quality or improper installation, warranty insurance can cover the expenses to repair or replace it.

In contrast, public liability insurance protects businesses against the legal defence costs and compensation claims where a claim is being made against you if that results in accidental injury or property damage that is caused by your business operations. It does not cover the cost of rectifying poor workmanship itself.

Importance of understanding your coverage

It’s important that you fully understand the details of your insurance coverage. Carefully reviewing insurance policies means you will know what’s included and what is not.

When you’re clued up on the specifics of your particular coverage, it can help you to avoid any unexpected financial pitfalls. In taking a proactive approach in your business’ insurance cover, you give it the best chance of being fully protected with the appropriate policies and spotting any gaps in your cover that you can then address.

Seeking the right insurance

If you’re feeling unsure about getting your business the cover it needs, it’s always wise to consult with insurance professionals.

Insurance experts can help you understand and obtain the right kinds of insurance for your business. Whether that's public liability insurance, warranty insurance or something completely different, they should be able to tell you exactly what you need.

Choosing your insurance policies in line with your specific business needs can help you avoid gaps in coverage that might result in financial risk.

Public liability insurance from Towergate

To recap, public liability insurance can shield your business from injury and property damage claims. However, it will not cover poor workmanship.

For claims against defective work, consider arranging warranty insurance. It can help with the cost of rectifying substandard work.

Always consult with insurance professionals to ensure you have the best coverage for your business needs.

Get a public liability insurance quote

If you’re looking to get covered, don’t miss our public liability insurance, designed to safeguard your business operations. Get a quote today, either online or by phoning us on 0330 818 9929.

About the author

Alison Wild BCom (Hons), FMAAT, MATT, Taxation Technician is a highly respected industry professional who has been working with and advising SMEs in areas including tax, pensions, insurance and marketing for over 25 years. She is a Fellow member of the Association of Accounting Technicians (AAT), member of the Association of Tax Technicians (ATT) and also has over 20 years' experience as a residential landlord.

Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.