Public Liability Insurance
Advice for anyone leasing Council Land or Property or working on behalf of the Council
Why You Need Public Liability Insurance
Public Liability policies indemnify an organisation against compensation claims for damage and/or injury made against it by a third party, but only if the organisation is legally liable. This may involve the claimant taking the organisation to court to prove negligence.
Most public liability policies also cover legal expenses incurred in respect of the claim. This is important, as many claims are speculative but still require legal representation in order to defend.
Who should provide public liability insurance details to the Council?
Anyone who provides a service to or on behalf of the Council or who uses Council Land or facilities.
Can the Council policy be extended to cover contractors or other organisations or individuals?
No. The Council's policy can only cover the Council. There is no cover for the liabilities of contractor's or other groups and the policy cannot be extended to cover them. The only exception to this is for volunteers who are assisting the Council in its business.
Why do we ask for public liability insurance details?
As explained above only the Council's legal liabilities are covered. This does not mean that the Council cannot be found partly negligent for the actions of a contractor.
We request public liability insurance details for the following reasons:
- Protection of the Public - If a contractor or other group is not insured they will have no means of compensating the public other than from their own finances. This may not be sufficient.
- Protection of the Council - If a contractor or other group are not insured then it may be impossible to pass the claim onto them. This means the Council may end up paying the full cost of any compensation. Higher premiums as the result of poor claims performance will be reflected in insurance recharges to individual services.
- Quality Control - If a contractor or group appreciates its risks, it will arrange its own public liability insurance.
- Protection of the Contractor - Councils receive a large number of claims. Contractors or other groups providing services for councils are therefore likely to receive claims as well. The insurers will not hesitate to redirect claims to a contractor if they consider them to be even partly responsible. Where court proceedings are commenced contractors or other parties may be joined as second defendants. Once again uninsured contractors will pay for claims (and legal costs) from their own finances.
- Claims Handling - Obtaining details following an accident can be difficult if the party involved is uncooperative. Being able to contact their insurers directly does assist the Council in dealing with the claim and limiting our financial exposure.
What indemnity limit should be requested?
The recommended minimum limit of indemnity is £5 million. Some contracts will require higher limits depending on the risk exposure. This limit may seem unrealistically high but requesting an indemnity of £5 million has been considered best practise since 1988. There have also been substantial increases in compensation payments in the last five years and indemnity limits today have to be sufficient for claims that may not be settled for many years in the future.