Public Liability, All An Owner Builder Requires! Right?

June 2, 2019 2:39 am Published by Leave your thoughts

This a view held by many unqualified know-alls who try to simplify insurance into something that distorts the real risks confronting owner builders. Claims of personal injury or property damage can be frighteningly expensive, and whilst you may not be at fault, you may still incur considerable legal costs defending yourself.

Public liability insurance is designed for owner builders who engage sub-contractors to work on their site and construction project. The key concern is how secure is an owner builder, in other words a property owner who holds a tangible realisable asset, protects themselves against claims for personal injury or property damage suffered by a third party, or alleges to have suffered as a result of working, visiting or delivering to your site.

An owner builder and their partner, spouse or joint property owner is front and centre for all claims, when somebody is injured or finds their property is damaged, stolen or made unusable whilst providing services on the home building site. Statistically third party owner builder claims, are segmented into 2 categories, where an owner builder recalls an alleged incident or has verifiably seen the damage, and secondly those claims or letters of demand that come as a bolt out of the blue. The latter, is overwhelmingly more prevalent[1], particularly over recent years as courts[2] have placed more emphasis with broader interpretations on negligence, duty of care and responsibility in such injury matters.

Public liability insurance only covers claims made by external parties, not those made by your loss. Insurance contracts are complex, driven by legal precedence and interpretations. Separation of an owner builder’s loss, personal loss or third party loss is in most cases reliant on an underwriter’s interpretation and intent, but an insurers’ views does not necessarily correlate with a legal interpretation or precedents. An example is the frightening number of lawyers working on insurance cases across Australia, litigating on interpretations and precedence’s, and proving in essence insurance broker’s views are nothing more than an opinion, and in most cases an unqualified legal opinion at that! This is true kernel of insurance, particularly owner builder insurance, and for reason comprehensive cover, makes provisions and allowances for these legal interpretations and provides broader, richer, relevant cover. But, no all insurances are comprehensive and not all disclose sales people this distinction.

Comprehensive owner builder insurance provides broad, yet effective public liability cover, including legal liability, and third party cover. Moreover owner builders are better protected if public liability elements are broadened to include material damage cover. In most cases the impact to premium (price) is minimal.

[1] 2015-2018 owner builders’ liability claims trends. Qiducia Owner Builder Insurances Underwriting

[2] 2018 Owner Builder Claims & Disputes Report.  Qamvis Insurance Group

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This post was written by Technical Underwriting Centre

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