Understanding Public Liability Insurance
Public liability insurance is a type of insurance that provides protection to individuals and businesses against claims made by third parties for injury, loss, or damage caused by their business activities. This insurance covers incidents that occur in a public place or on private property. Incidents such as slip and fall accidents, damage caused to property, or injury caused by the business’s products or services are typically covered by public liability insurance.
The coverage amount for public liability insurance vary depending on the type of business and the risks associated with its operations. However, most policies have coverage of $5 million, $10 million or $20 million or more to cover potential claims. It is important for builders to have adequate public liability insurance coverage to protect themselves and their clients from potential financial losses.
Verifying a Builder's Insurance Coverage
When hiring a builder, it’s crucial to verify their public liability insurance coverage. The following steps can help homeowners ensure that the builder is properly insured.
- First, request a copy of the builder’s insurance policy and check the policy details. The policy should be valid and up-to-date. Look for the policy’s start and end dates, coverage limits, and the types of incidents covered.
- Next, verify the policy with the insurance company to confirm that it is valid and covers the builder’s work. This can be done by contacting the insurance company directly or through an insurance broker. It’s important to check the policy number, name of the insured, and the policy dates to ensure that the policy is current and valid.
- Finally, check the validity of the insurance policy by checking the insurance company’s information. This will confirm that the insurance company is authorised to provide insurance in Australia and that the policy is valid. The information can be accessed online through the Australian Securities and Investments Commission (ASIC) website.
By taking these steps, homeowners can ensure that the builder they hire is properly insured and minimise their risk of liability in case of any incidents.
What to Do if a Builder is Not Properly Insured
It is crucial to work with a builder who has valid and adequate public liability insurance coverage. If a builder is not properly insured, it could potentially lead to significant financial losses and legal issues. In such situations, homeowners have a few options available to them. They can refuse to work with the builder until they have obtained proper insurance coverage. Alternatively, homeowners can ask the builder to obtain the necessary coverage before commencing work. It is advisable to consult with a construction lawyer to discuss the legal options available in such situations.
Protecting Your Home: The Importance of Verifying a Builder's Insurance Coverage
Verifying a builder’s public liability insurance coverage is crucial for protecting your home from potential risks. In this article, we have discussed the definition and types of incidents covered by public liability insurance, steps for verifying a builder’s insurance coverage, and options available to homeowners if a builder is not properly insured. As a construction lawyer with over 10 years of experience, I highly recommend that homeowners take the necessary steps to verify a builder’s insurance coverage before beginning any construction project.
To help you protect your home, we have created a “Builder License and Insurance Verification Checklist”. Download this checklist and use it to ensure that you verify a builder’s insurance coverage before starting any construction project.