As the UK economy struggles to recover from recession, the construction industry is continually suffering with a fall of 3.3% in total output from July 2010 to July 2011. With the majority of businesses in the sector being SMEs (small to medium-sized enterprises), it has become increasingly difficult for construction companies to maintain sensible budgets. This means that the value of finding cheap liability insurance is all the more important.
The UK construction industry consists of 300,000 companies that employ a workforce of over 2 million people. Last year (2010), there were 50 fatalities, 3120 serious injuries and the loss of 2.3 million working days (an average of 1.1 days per employee) due to work related injuries or illnesses in the construction sector. These statistics support the fact that construction remains one of the most dangerous professions in the country. Consequently, obtaining liability insurance is all the more vital as construction companies cannot afford to pay out the compensation and legal fees.
Employer’s liability insurance, required of all businesses under UK law, guarantees an injured employee will receive compensation that they are entitled to and reduces the employer’s costs on any pay out. To pay an annual rate and a one-off excess is far more practical for an employer than to pay compensation and legal fees in full. Insurance companies are sufficiently structured to provide up to millions of pounds of cover – the legal minimum being £5 million.
With most construction projects being carried out in urban areas, the chance of damaging third party property or injuring a member of the public is very high. Public liability insurance, although not necessary by law, provides valuable cover when a member of the public is entitled to compensation as a result of an incident for which the employer is liable. Again, an annual rate, sometimes as little as £40, and an excess is all the employer will have to pay for. Competitive policies offered by insurance companies are based on what kind of work will be taking place, where, how and who by. An insurer can provide combined liability insurance – employer’s and public liability insurance in one policy – with a decent annual rate.
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