Public liability insurance explained for engineers

You're changing a gearbox on a conveyor drive. Nights, short-handed, the line wants it back by six. You stand the guard against the walkway rail to keep it out of your way.

At shift change, an operator walks round the corner looking at a phone. The guard goes over. So do they.

Months later a letter turns up. It's from the site's insurer, and it has your name on it.

That's the job public liability insurance is there for. Most engineers buy it because sites ask for it, check the limit on the certificate, and never read the rest. The rest is where claims get paid or don't.

What it pays for

Public liability covers claims made against you by members of the public or other businesses. It doesn't cover claims from your own employees (HSE40). Those need employers' liability, which is a separate policy.

On a site, "the public" means almost everyone who isn't you. Operators, drivers, the cleaner, the site's own fitters, a visitor on a tour. It also covers damage to property that belongs to someone else. Think oil from a fitting you loosened, soaking a pallet of finished stock. Or sparks from your grinder getting into a dust extraction duct.

It won't pay for your own injury. If you fall off a ladder, public liability does nothing for you. That's personal accident or income protection, and most contractors don't have either.

Why it matters more when you're on your own

On staff, a claim like that goes to your employer's insurer. You give a statement and go back to work.

As a sole trader, you are the business. GOV.UK puts it simply: sole traders have "unlimited liability", which means owners are "personally responsible for all of the debts of the business" (GOV.UK). A claim you can't pay could come out of your savings or your house.

A limited company gives some protection, but not as much as people think. GOV.UK notes you may still need extra business insurance with a company (GOV.UK). A limited company for engineers covers the rest of what changes. Setting up as a sole trader covers the other route.

What it often won't pay for

Every policy has its own wording, so read yours. These are the gaps we'd look for first:

• The machine you're working on. Many policies limit cover for property in your care or control. Damage to the gearbox you were fitting may not be covered, even if damage to the stock next to it is.
• Putting your own work right. If your repair fails, the cost of doing it again is usually yours.
• Your own tools and van, which need their own cover.
• Hot work. Some policies set conditions, such as a permit, a fire watch and an extinguisher to hand. Break a condition and the claim may fail.
• Work after you've left. If a fault in your work causes damage weeks later, check whether your policy covers that.

If any of these matter to the work you do, ring your broker and get the answer in writing.

Read the site's contract too

Here's where good engineers get caught. Some site terms ask you to cover losses that go well beyond the law. One line, often called an indemnity clause, can make you liable for the site's lost production if your work stops the line.

Your policy may not match what you signed. Downtime on a busy line runs to serious money every hour. Managers who have worked out what an hour of downtime really costs know that figure dwarfs any contractor's fee. If you agree to carry it and your insurer doesn't, the gap is yours.

So before you sign a site's contractor terms, send the insurance and liability section to your broker. Ask one question: does my policy cover what this asks me to carry? If the answer is no, ask the site to change the wording. Plenty will.

The limit

The limit of indemnity is the most the policy will pay. Sites set their own minimum, usually in their contractor terms or approval form. Insurance for contract engineers covers what else they check.

Here's our view. Buy the limit your best sites ask for, not the cheapest one that gets you through most gates. The extra premium is usually small next to one lost job. And the premium itself is a business cost: insurance is listed among the allowable expenses for the self-employed (GOV.UK).

When something goes wrong

What you do in the first day matters to the claim.

Tell your insurer as soon as you know about an incident, even if nobody has said the word "claim". Read the policy's conditions now so you know what they expect. Many policies say you mustn't admit fault or offer to pay. Be helpful and honest with the site, and leave the question of who pays to the insurers.

Then keep your records. The permit, the isolation sheet, your photos, your timesheet and a written note of what you did and when. Make the note the same day. Writing a fault report an engineer can use is a good model. The engineer with a clear record is easy to defend.

What to do on Monday

1. Download your full policy wording as well as the certificate, and read the exclusions.
2. Check what it says about property in your care, hot work and work after you've left site.
3. Send the liability section of your last site contract to your broker and ask if your cover matches it.
4. Save your insurer's claims number in your phone.