Public liability insurance for construction contractors

What construction public liability insurance is

Public liability insurance addresses what you may become legally liable to pay to someone else because of your business operations. A third party is anyone other than you and your employees: a passer-by, a neighbour, the owner of an adjacent building, a motorist or the employer’s own property.

The cover does not pay simply because something went wrong on site. Liability generally has to be established, and the insurer assesses the claim against the policy terms. Where cover applies, it usually extends to legal costs incurred with the insurer’s consent, within the limit of indemnity.

It also helps to be clear about what public liability is not. Damage to your own works is a matter for Contractors All Risk insurance. Injury to your own employees is dealt with through statutory and employers’ liability arrangements. Advice and design are a professional indemnity question.

Who may need public liability insurance

• Contractors working near the public, roads, pavements or adjoining properties, such as roadworks, drainage and building contractors.
• Contractors required by tender or contract to hold a stated minimum limit of public liability cover.
• Subcontractors whose main contractor requires proof of their own liability cover before they may enter site.
• Plant hire businesses that supply operated plant and want to understand their exposure to third-party claims.
• Contractors who excavate near existing services, where damage to pipes and cables can lead to significant third-party claims.

What may be covered, subject to terms

Bodily injury to third parties

Injury to members of the public or to others on or near your work, where you are legally liable.

Damage to third-party property

Damage to neighbouring buildings, vehicles, boundary walls and other property that is not yours, subject to exclusions and conditions.

Legal costs

Defence costs incurred with the insurer’s consent, usually within the limit of indemnity. Check whether costs sit inside or outside the limit.

Subcontractors

Liability arising from work carried out by subcontractors can be addressed in the policy, and insurers often ask about the subcontractors’ own insurance and contracts.

Indemnity to principals

Many contracts require the employer or principal contractor to be indemnified or noted as an additional insured. Policies can sometimes be extended to do so, subject to terms.

Completed operations

Liability arising after the work is completed, where the policy includes it. Check how long it applies and what is excluded.

Important limitations and questions to discuss

Underground services

Damage to buried pipes, cables and other services is a leading source of claims on civil sites. Policies may exclude it, impose a higher excess or a lower limit, or require evidence that services were located before work started.

Vibration, removal or weakening of support

Piling, excavation and demolition near existing buildings can cause cracking or subsidence. Cover is often restricted for these causes, or only available with special terms.

Pollution and contamination

Gradual pollution is commonly excluded. Sudden and accidental pollution may be treated differently, and the policy wording needs close reading.

Contractual liability

Liability you accept under a contract, beyond what the law would impose, may be excluded. Review indemnity clauses in the contract before signing.

Employees and professional services

Injury to your own employees and negligent professional advice are generally outside this cover and need separate consideration.

Limit of indemnity and excess

The limit is the most the insurer will pay for a claim or in total. Check whether it applies per event, per period or both, and what excess you carry.

Specialist activities

Blasting, piling, demolition, work over water, working at height and underground work may need to be declared and may be excluded or priced separately.

Exposures to assess on a construction site

The examples below illustrate why the detail matters. They are exposures to assess, not statements that any policy will pay.

Information we usually need for a quotation

The information below helps the insurer see how your business operates and what the contract requires. See our guide to construction insurance quote documents.

You do not need everything on day one. A short description of the work is enough to start, and the quote form only asks for the details relevant to your enquiry.