Prof indem insurance versus public liabillity

Public liability insurance covers only accidental damage to persons (tricky one) or property you damage whilst working. The period in which a claim may be made is usually specified and quite short, as such accidents should become obvious immediately.

Professional indemnity insurance is very different, it (should) cover things that go wrong because you were professionally incompetent, and this may not become obvious for a long time. Most policies require you to continue to pay premiums to keep the cover going, but the risk to single electricians is in reality small, so fairly low premiums. If you are a designer of larger projects, say hospitals, then the premiums will be bigger and need to continue for longer. Grenfell is likely to significantly increase premiums for everybody because there will probably be many claims once the Lawyers get going.

Persons carrying out EICRs should have PI insurance as there are ongoing risks. Claims are very low however because proving error MAY be very difficult and not worthwhile. I have no idea what happens with a drive-by although JP may have an idea as he appears as a professional witness in such cases.

Hope that helps, but if you are unsure contact your insurer who will provide full details of the small print in English!

As above, PI is the one with the long hangover - it may be a decade before the storm that makes the new building collapse due to the architects slip up with the design. The builders only followed the designers plans. I appreciate the electrical equivalent is unlikely.

Unless there  is a a specific 'and for xx years thereafter'  clause (and for retiring consultants, there is, if you ask for it, but it costs more) the insurance normally stops in the last year you paid for. This is so called 'run off' cover. Arguably not needed beyond some point, but what is sensible for that cut-off?

Also is it the legal entity Ebee Ltd who is insured or Mr Ebee, as it makes a difference how things are set up- when I say something is safe  on behalf of my employer, the disgruntled customer will go after them first, and to a degree, it is up to them to verify my competence before trusting it- the employer then has to decide to come after me if they feel it is appropriate, not the end customer directly. 

And if the Ltd company has been wound up then there the liability trail largely goes cold. (and it seems a great many small builders go out of business over one badly done job, but the folk who worked for them eventually resurface elsewhere, - it seems quite often to regroup and to repeat the errors.)
In principle someone could start a private action against the individual at any time, but unless it is really serious this raises the difficulty bar such that it is a lot less likely, and only worth it if things are so bad that a successful claim is almost guaranteed. (and there may be associated criminal investigations)

Add to this your normal limited terms and conditions of trading - 'work is guaranteed free of defects of material or workmanship ' but for how long, and eventually the statute of limitations. This last is quite short for such unprofessional oversights like forgetting to notify building control, (non indictable) but liability is potentially never ending if your design decision happens to kill someone and it could clearly have been foreseen at the time.

If your policy is still running, then inform your insurer that you intend to  cease trading. They will attach an endorsement to your policy stating that cover will not be provided for any service or work provided after that date.  At the next renewal the insurer will offer "run off" renewal terms and may ask you to complete a proposal form as in the past, so as to establish what work you undertook from the last renewal to the date your company closed.

And google 'run off cover'. I am not an expert.

Mike.

mapj1 said:

And google 'run off cover'. I am not an expert.

I also believe that's what you'd need ... just to make sure someone doesn't come after your home or other assets.

It's entirely possible (but as has been said, probably remote chance) that someone might be advised to proceed against a professionally registered engineer if the company that employed them has ceased trading - this has happened already to a Chartered Surveyor (Merett v Babb).

But I also am not an expert.

Those worried by the Merrett v Babb precedent, where it was decided that employees may be personally liable for decisions they made and advice given during employment, even thought the fee for Mr Babbs advice was not paid to him, but his employer,

https://www.cms-lawnow.com/ealerts/2001/07/merrett-v-babb-employees-are-personally-liable-for-professional-advice?cc_lang=en

may take heart from more recent cases

https://www.wrighthassall.co.uk/knowledge-base/courts-dismiss-two-merrett-v-babb-type-professional-negligence-claims

Where the principle has been to some extent contradicted. None the less, if there  is a credible possibility of really large claim, some sort of personal cover against it, for some years after end of business, may be a good idea.

It's all in the contract, but run-off cover may be advisable.

Public liability is less likely to be manifest after the event, so if a plumber trips over your equipment and suffers an injury, this insurance would cover you. Self evidently, once you have left the site, you are not going to cause any further harm to anybody else.

Professional indemnity cover is for giving professional advice or an opinion, so design and EICR. Clearly, design errors or the consequences of a drive-by EICR may not be evident immediately.

The Limitation Act 1980 gives a claimant 6 years from the date of damage occurring to put in a claim so run-off cover would normally be maintained for that period.

The longer time has elapsed since the work was done, the more difficult it will be to prove causation.

Chris Pearson said:

It's all in the contract,

Only a Court can decide that ...

Or in cases where the wrong was not immediately obvious, limitation clock starts ticking only from the date the victim becomes (or may reasonably be assumed to have become ) aware of it, the example the text books use  is for medical malpractice, where it is not until a patient shows symptoms and goes to a second doctor, and they are told for example that their previous surgery was botched do they have a cause for legal action.

In the language of the legals the 'cause of action does not accrue' until both

1) the defective work has been done, and

2) It has been discovered and reported to the victim.

So the poor EICR may not be found until the next one, and then there are 6 years to go after whoever did the first one. But in practice, without some other accident or injury occurring , there would be no point.

The Speedy, Bodge, Leggit and Scarper are quite safe unless their negligence actually does real damage.

Mike

I am not sure that is quite correct. Personal injury (including clinical negligence) is treated differently from other causes of action.

What isn't entirely clear to me is that if an inadequately tightened terminal does not cause a fire for say 10 years, whether the cause of action is the inadequate workmanship or the fire. I think the former, but in any event whilst the fact that a terminal has been arcing and caused the fire may be obvious, it would be difficult to show when the arcing started.

Around fifteen years ago I had a conversation over a cup of coffee with a customer who is a Chartered Structural Engineer, he said the best exit plan is to sell your business as a going concern and any liabilities with it, then let the new business owners carry on paying the insurance.

The last two comments especially make me wonder how long the initial liability per insurance should/does actually last (Your legal liability ref your life savings and liberty could be at stake anyway but what about insurance cover to pay some damages/reimbursement to the affected parties?)