Put together from various (DW and other sources) - A Guide To Liability Insurance ________________________________________ Hopefully this will shine a little light on the various covers and options available to help you with the decision on what is most appropriate for your business. Apologies if I’ve used any insurance jargon which people don’t understand, but please ask if there is anything that requires further explanation. Public Liability Insurance Whilst this cover is not compulsory, it should be considered as a necessity by anyone running their own business. Unfortunately we are living in a litigious society where people are aware of their rights to claim. Years ago, if someone tripped over your hosepipe they would have got up, brushed themselves down and walked off thinking how stupid they were for not looking where they were going. It’s a different story these days and now, with the ease of access to personal injury solicitors, people will be seeking financial compensation for their injuries. Basic protection for you and your business is available for well under £100 and will indemnify you up £1,000,000 (or higher if required) against claims for damage or injury from a Third Party (i.e. another person) as a result of your negligence for which you are legally liable. There are two types of policy available for valeters/detailers, a “Per Capita” Liability policy and a Motor Trade Liability policy. There are distinct differences between the covers under the policy and, in the same respect, substantial differences in premium. “Per Capita” Public Liability There are quite a few Insurers who offer “per capita” Public Liability policies. These are traditionally for Tradesmen who operate without premises (bricklayers, painters & decorators, carpenters etc) and the premium is based on the number of persons, hence “per capita”. Some Insurers have an extensive acceptable “trade” range under these policies and include the business description “Car Valeters”. These policies are competitively priced and premiums for one principle start from well under £100. The excess for “third party property damage” (i.e. the first amount you have pay towards a claim) is generally £100 depending on the experience in the trade. Per Capita policies do have their limitations. You have to bear in mind they are generic policies for a wide range of trades and the policy is then endorsed with specific trade exclusions (e.g. depth limits for ground workers, exclusion of tree felling for landscape gardeners etc). With regard to valeters, it is important to note the following – Trade Description – I’ve gone through the underwriting guides of a number of Insurers and they all state the trade description as “Car Valeters” and at best “Valeters of Cars & Vans Up to 1000kg GVW”, although there aren’t many vans less than 1000kg’s! Exclusion of Items Worked Upon – the policy will exclude any damage to car you are valeting/detailing. This is not just as a result of the act of cleaning but a full exclusion and therefore any damage to the vehicle, regardless of cause, is excluded. So you have to bear in mind that whether you damage the car either by cleaning it, dropping something on it, or any other cause, you will have pay for the damage yourself. Cover for items worked upon is available under a “Motor Trade Liability” policy (more about this in a minute) but the premium for this is over of £400 and with an excess of £1,000! On this basis, if you take out a “per capita” policy and do happen to damage a car whilst working on it, effectively you can pay out circa £1,300 of damage and still break even on the alternative insurance costs/excess of a policy including items worked upon. This is where you need to weigh up your exposure to a claim, the potential maximum cost of any damage to vehicles you are working on and affordability of the policy (i.e. the comparative cost of the two policies) and then decide which policy you require. My advice would always be to take the policy that offers the most protection, but financially this is not always feasible. If you are involved in potentially higher risk activities such as jet-washing engines or are working on high-end vehicles with a potentially high cost for any damage, then you really should be looking to include damage to items worked upon. With regard to the business description, I have argued with the Insurers that if they are excluding damage to the item worked upon, why they have a vehicle restriction as it doesn’t matter if you are working on a car or a van when the Insurers won’t be paying any damage to the vehicle anyway! They did explain that in view of the low rate of the premiums they are only looking to attract “car” valeters and consider the activities of cleaning vans etc a higher risk and not something they want to expose themselves to under the policy. Therefore under the “per capita” Liability policy, if someone trips over your hose whilst you are cleaning a car then this covered, but if someone trips over a hose when you are cleaning a van, there is no cover under the policy as this falls outside the business description. The policy excludes any motor vehicle liability (this should be covered under a Motor Trade Road Risks policy). So to summarize, a per capita policy is a competitively priced Public Liability cover with a low policy excess but only applies in respect of the valeting of cars and excludes any damage caused to the car you are cleaning. Subject to an additional premium, some per capita policies can be extended to include tools cover. This provides cover for your tools and stock. The limits vary, but normally the limit is a total of £1,500 per person with a single item limit of £750. The vehicle has to be locked for theft cover to apply and overnight theft is excluded from vehicles unless it is in a locked garage between the hours of 9pm and 6am. Usually an excess of £100 applies to claims. Our EXCLUSIVE “Per Capita” Liability Scheme Having read the above, hopefully you will be understand that whilst “per capita” Public Liability policies offer great value for money, the trade definition is very restrictive, covering “car” valeters only and with low sums insured for tools, equipment and stock. Working with members of the valeting industry, I have negotiated a facility with a leading UK Insurer that will cater more specifically for valeters and the type of work they do. The Insurers eventually agreed to my proposals and rating structure and the benefits of this exclusive scheme are as follows- * Competitively priced “per capital” Liability Insurance * Trade description “Mobile Car Valeters & Detailers” * Business activities endorsed as “Mobile Valeting & Detailing of Cars, Vans up to 3.5t, Motorhomes & Caravans (provided income from vans, motor homes & caravans does not exceed 10% of turnover)” * Public Liability indemnity limits available are £1m, £2m & £5m * Cover for Tools, Equipment & Stock at £1,500, £2,500 & £5,000 with a single article limit of £1,000 and subject to a £100 excess * Option to include Employers Liability and Temporary Employees cover * £100 Third Party Property Damage excess (increasing to £350 for persons with less than two year experience in the valeting trade) To give you an indication of premium, for a valeter with at least 1 years experience requiring £1m Public Liability and £5k tools/equipment/stock, the annual premium required will be £150 inclusive of insurance premium tax. Please note that, as with all “per capita” policies on the market, damage to “items worked upon” is excluded. Again, if you require this cover, we can arrange a Motor Trade Liability policy (further details of which are later in this post). With regard to the Goods In Transit, the limit of £5k on the tools/stock and equipment with a single article limit of £1,000 should hopefully be enough cover for most, but if higher limits are required, again I can arrange a separate “Goods In Transit” policy if required. It is also important to note that the overnight theft is excluded between the hours of 9pm and 6am unless the vehicle is securely garaged. It does however cover theft from a locked vehicle outside these hours (for example, if you stop off at a supermarket to buy a sandwich on a way to a job and come back to find your van forced open and all your kit stolen, or worse still the whole van including your kit) and also covers the good should they be damaged in accident. If overnight theft cover is required, we can arrange a separate Goods In Transit policy including overnight theft but obviously a higher premium will apply. Motor Trade Liability Insurance Public Liability for valeters is available under a Motor Trade Liability policy which caters more specifically for persons in the Motor Trade. The premiums are based on annual turnover and wage roll figures and can cover a wide range of motor trade activities (not just valeting) and also a much wider range of vehicles. The standard policy usually covers cars and vans up to 3.5 tonne GVW and can be extended to cover various other things such as HGVs or agricultural plant. Various levels of cover are available and these are usually £1m, £2m or £5m. As a sole trader valeter/detailer, depending on the level of cover selected, you can expect to pay around £420 with an excess of £500 in respect of third party property damage. Damage to Items Being Worked Upon (Care Custody or Control) – the premium of £420 includes an extension to damage to "Motor Vehicles" whilst being worked up. You may find that some of your customers insist that your Public Liability policy covers the vehicles you are valeting/detailing and this will ensure that you are adequately covered. There is limit of £50,000 in respect of this extension which can be increased to £100,000 subject to an additional premium. As stated earlier, an excess of £1,000 applies to damage to items worked upon which means you will be responsible for the first £1,000 of any damaged to the vehicle. (UPDATE - EXCESS REDUCED TO £500 - SEE http://www.detailingworld.co.uk/foru...ad.php?t=64491 ) Servicing Liability The policy cover also includes Servicing Liability. This is something normally taken up by mechanics and the like and covers the consequential loss of your actions. I consider this an essential cover for anyone selling or servicing cars and an example of this would be not tightening wheel nuts properly, customer drives off, wheel falls off, car crashes etc. and the policyholder’s legal liability in respect of any damage or injury will be indemnified. There is certainly a much lower exposure to claims of this nature as a result of valeting/detailing but it is still something that should be considered when making a decision on which policy to take. I guess examples of potential claims would be overspill of tyre shine on brake discs causing the brakes to fail, or perhaps overspill of polish onto foot pedals following an interior valet and so on. It is not possible to extend this policy to include “Goods In Transit” cover and it will be necessary to arrange a separate policy if this cover is required. Employers Liability Insurance Finally, if you employ anyone, even part time or casual, it is a statutory legal requirement that you have Employers Liability in force. This is explained further here - http://www.hse.gov.uk/pubns/hse40.pdf Employers Liability indemnifies the policyholder against any injury or disease suffered by their employees during their course of employment. Again the employer has to be legally liable for the injury or disease, but it is often the case that courts rule in favour of injured party where employees are concerned. Obviously you have a duty under Health and Safety requirements to provide adequate training, protective gear and so on to provide a safe working environment for your employees, but a chemical splash to the eye could result in a claim and it will most likely be successful due the employer failing to supply and insist on the wearing of the appropriate protective clothing/goggles, there could be back injuries due to lack of training on lifting procedures, injuries due to improper use of machinery as a result of insufficient training and so on. It’s a minefield! Both the per capita and the Motor Trade Liability policies can be extended to include Employers Liability at an indemnity limit of £10,000,000. If you have employees, the Public Liability Insurance also extends to include the actions of your employees. Goods In Transit If you require more than the £5,000 or a single article limit higher than £1,000 provided by under our Liability Scheme, or wish to include overnight theft, or opt for the “Motor Trade Liability” policy, we can arrange a separate Goods In Transit policy. Premiums tend to start at around £150 with a £100 excess, depending on your location, limit of indemnity and if overnight theft is required. If overnight theft cover is required, a 20% co-insurance clause will apply after the deduction of the policy excess. For example, if you had £2100 of kit stolen overnight, the insurers would deduct the excess of £100 and then a further 20%, therefore the settlement would be £1600. Please feel free to ring to me if you are interested in taking out a policy and require any further information or a quotation. My contact details can be found here – Contact us | Valeters Insurance from Coversure Swindon
