What is Subcontractor Public Liability Insurance?


A subcontractor is a person who works for other companies as independent business owner in their large project. But getting a project from main contractors are not easy for the subcontractors until and unless they do not secure themselves from the compensation and legal costs which may occur in future due to their negligence or by accident. In short, they do not get hired until they do not have the subcontractor’s public liability insurance for their business.

What is Subcontractors Public Liability Insurance?
It is the subtype of business insurance. This insurance protects the subcontractors against any compensation claimed by the third party occurred due to the accident of subcontractor during the business activities. This could be anything including a tile hurt the member of the public to the damage of assets which own by the member of public etc. This also included the damage to the customer or even the main contractors who hired the subcontractor for their large projects.

Why subcontractors need the PLI for their business?
Having this insurance is not required by country or local law. But still, it is very important for subcontractors to have this insurance. Why? to get the projects. In the real world, it is very hard and even impossible at some places for subcontractors to get the projects by the main contractors without having this insurance. The main contractor knows that there are very high chances of accident and third party is usually involved while the subcontractors perform their business activities. That's why they only prefer to hire only those subcontractors who have protected themselves from such type of claims which may occur at the business place due to the subcontractor's mistake. So, this is very important for them to have this insurance.

Although, the nature of subcontractors business is very risky. Having this insurance could save them and their business to go down in the time of need when there is no cash in the bank and the third party sued them.

What are types of claims under PLI?
There isn’t any list of claims or rule there. The claim has been depending on the court when the third party sues the subcontractor. Usually, the claims could be anything from dropping the brick on someone head to his car. Some of the major examples or types of claims for which this insurance is popular among subcontractors are:

  • ·       As subcontractor, you forget to put the warning sign and someone got hurt
  • ·       You dropped a tile by mistake or accident and its lands on someone's head
  • ·       A public member got injured because you left the excess water on the floor
  • ·       Water damage due to your mistake because you break a pipe during plumbing.

These are some common examples of claims which have been covered by the public liability insurance for the subcontractor in the time of need. This also includes the legal cost. For example, if the third party did not win the case in the court, then you still have to pay the legal fee. The insurance will also help you with this.

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