We’ve seen plenty of public liability insurance claims from electricians undertaking solar installs over the years.

One of the common themes we see are claims involving damage to a building’s roof.  Typically this is as a result of workers damaging the roof whilst walking over it or moving materials around.

Whilst damage caused to the roof will generally be covered under your public liability insurance policy, there can be an important – and costly – part that isn’t.

Before we go on, we must stress that the information in this article is general in nature and is not specific to one individual policy or client.  All claims are assessed by the insurance companies on the individual circumstances, and this article should not be taken as advice on how any particular policy will respond in the event of a claim.

What parts are covered?

Let’s start by looking at what would be covered in this hypothetical claim.

For this example we’re talking about an electrical contractor who undertakes solar installations.  We’ll assume that the client has advised us of their business activities and is properly covered.

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They install the solar panels on a roof, connect everything up and complete the job as normal.  They’re unaware that they’ve caused any damage to the property during the works.

There are a few things that could happen next…  The property owner notices damage to the roof and demands that it be fixed.  Worse still, at the next rain event water enters the premises as a result of the damage and causes damage to the interior.

We’ll stop here for a moment.  The damage caused to the roof, as well as the water damage inside the property, would generally be covered by the electrician’s public liability insurance.

This is because the damage was as a result of the electrician’s negligence.

Public liability insurance covers property damage and personal injury suffered by a third party.  The electrician damaged property, both by damaging their client’s roof, and the subsequent damage inside caused by the rain coming in.

So, case closed right?  The damage is all covered, happy days!

Not quite…

What isn’t covered?

Whilst the cost of repairing the damaged roof is covered, what about the cost of removing the solar panels and associated equipment, then reinstalling it after the roof has been repaired?

This is the part that is not covered and would typically be referred to as “rectification costs”.

You might be able to do this work yourself, in which case it’s mostly going to cost you time rather than money.  But of course, time is money in any trade business…

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However, we’ve often seen that the client of the electrician has no interest in having them back to do the work again, given that they (the electrician) is the one who caused the damage in the first place.

So instead they, or the company doing the roof repairs, will organise for a different electrician to come out and remove then reinstall the panels.

That doesn’t mean you get away scot-free, as they will be sending you the bill for that work, and your insurance company isn’t going to pay it for you.

We’ve seen claims exactly like this where the insurance company covers all the costs for the roof repairs, and potentially the internal repairs, but they won’t cover the thousands extra for the removal and reinstallation of the solar panels.

This is nothing to do with the quality of the insurance policy or the skill of the insurance broker.  It’s simply that public liability insurance does not cover rectification costs.

What can you do about it?

From an insurance perspective, unfortunately there isn’t really anything you can do about it.

Whilst many risks in a trade business can be insured against, rectification costs generally aren’t one of them.

Instead, be aware of what you are and aren’t covered for and be prepared for the fact that insurance isn’t going to cover 100% of the costs for 100% of the mistakes that are made on the job.

And whilst we’d never suggest that any of our clients are being reckless when causing such damage, it’s still important to take the utmost care when working on client’s property in order to avoid claims in the first place.

Remember that insurance is there for unforeseen events.  It’s not there to fix up work that was below an expected standard.

Is this only an issue for electricians or solar installers?

Rectification costs and faulty workmanship can affect claims from virtually any trade.

Take a carpenter as an example.  He’s recently built a great looking pergola, but has done something slightly wrong with the build.

That error later causes the pergola to collapse and causes injuries to a family having a BBQ under the pergola, as well as damaging part of the existing dwelling (a set of glass bifold doors) and the outdoor setting.

The carpenter’s public liability insurance will respond to the personal injury and property damage, but the property damage coverage is limited to the damage to the bifold doors and the outdoor setting.

The cost of rectifying the work the carpenter completed (i.e. rebuilding the pergola) is not covered by the insurance.  The carpenter would either need to rebuild the pergola at his own cost or cover the cost for a different carpenter to rebuild it.

The easiest way to think about it is that public liability insurance will cover the damage that your work causes, but it won’t cover the work itself.

More information

Your broker will be happy to talk through different scenarios with you, but ultimately, each claim will be assessed based on its own unique set of circumstances.

Solar Installers - Public Liability Insurance Claims