Why your public liability insurance might not pay out

I run a scaffolding company, and if you asked me which insurance policy I would least like to discover was not going to pay out, it would be public liability, without hesitation. It is the cover that stands between you and catastrophe when your work hurts a member of the public or wrecks someone else's property - a passer-by struck below a scaffold, a dropped scaff tube through the roof of a parked car, a fire that gets traced back to something you did. Those are not far-fetched scenarios; they are the exact things public liability exists for. And yet, from every conversation I have had with other trades, it is also the policy people understand the least, and the one most likely to be refused on something that feels, at first, like a technicality - until you realise it is not a technicality at all, but the whole basis on which the cover was ever offered. So let me walk through why a public liability claim actually gets turned down, because once you see the pattern, you can make very sure it never happens to you.

It only pays for negligence - so negligence is exactly what they examine

Start with what public liability actually is, because the misunderstanding begins here. It does not pay out simply because someone got hurt near your work. It pays out when you are legally liable for that injury or damage - and in practice that almost always means you were negligent, that you failed to take reasonable care. That one word, negligence, is the hinge the entire claim swings on. Which means the insurer's investigation is not really about the accident at all; it is about whether you took reasonable care, because that is what decides liability, and liability is what triggers the cover.

And this is the moment your compliance paperwork stops being a dusty box-tick and becomes the most important evidence you own. If you can show you assessed the risk and had sensible, proportionate controls in place, you look exactly like a firm that took reasonable care - which helps establish, or dispute, liability in the right direction. If you cannot show any of that, you look like the opposite, and you can be certain the injured party's solicitor will paint that picture in the strongest colours they can. In a public liability claim, "we took reasonable care" is a claim you either back up with documents or watch someone else demolish.

The reasonable precautions condition - the quiet killer

Now to the conditions in the policy itself, and the first one catches more trades than any other. Almost every public liability policy contains a condition, usually worded something like this, that the insured shall take all reasonable precautions to prevent accidents and injury. Read quickly, it sounds like a motherhood statement, the sort of thing nobody could object to. Read as what it actually is - a binding contractual condition the insurer can hold you to - it is far sharper than it looks.

Because if an accident happened because a basic precaution was missing, the insurer can point straight at this clause and say you breached it. No exclusion zone underneath overhead work. No barrier around an open excavation on a footpath. No check on a hazard that any competent firm would have foreseen. In each case the insurer can argue that a reasonable precaution was not taken, that you therefore breached the condition, and that the cover need not respond. Your risk assessment is what stands between you and that argument, because it is the document that shows the precaution was identified and put in place. Without it, you are left arguing about what was and was not reasonable with absolutely nothing to point to - just your word, months later, against a solicitor with an injured client and a clear incentive to say you cut corners.

The risk assessment condition - doubling the exposure

Many commercial policies go a step further and make suitable risk assessments an explicit requirement of the cover in their own right. The insurer is not inventing a new duty here; they are piggybacking on one the law already imposes. The Management of Health and Safety at Work Regulations 1999 require every employer to make a suitable and sufficient assessment of the risks. The insurer simply writes that legal duty into the policy as a condition of cover, which means one failure can breach two things at once.

So picture the job that caused the loss having no site-specific risk assessment at all, or only a generic one that never named the actual hazard. You have now potentially breached the law and the policy in a single stroke, and the insurer can lean on either. This is, in my experience, the most common weak point in a trade's compliance - the site-specific risk assessment that either was not done or was done so generically that it addressed nothing - and it is precisely the one an insurer reaches for first, because it is so often where the crack is.

The competent-staff condition

Policies also expect, often explicitly, that the work will be carried out by trained, competent people. If the person whose work caused the injury was not trained or ticketed for what they were doing, that is another condition breached and another clean route to refusal. This is why keeping current training and competence records is not administrative busywork you do to satisfy some box - it is part of what keeps the cover alive and responsive. And it extends beyond your own directly employed people. If you use subcontractors, the insurer may well expect evidence that they too were competent, and that you had checked they carried adequate insurance of their own before you let them work.

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Subcontractors and the gap you fall through

Public liability claims involving subcontractors get messy faster than almost anything else, and it is worth understanding why before you are in the middle of one. If a sub causes the loss and their own cover turns out to be inadequate, lapsed, or simply non-existent, the claim has a nasty habit of rolling back onto you - and your insurer, faced with that, will want to see that you did your due diligence: that you checked the subcontractor's public liability was in force and adequate, and that they were competent for the work, before you engaged them. If you have no record of those checks, you are exposed on two fronts at the same time - liable for the loss, and in breach of your own insurer's expectations. Keeping evidence of who you engaged, that you verified their cover, and that they were competent, is not paranoia. It is the difference between a subcontractor problem being their problem and it becoming yours.

Non-disclosure: the refusal that was baked in from day one

Some public liability refusals have nothing to do with the accident at all, and everything to do with what you told the insurer the day you took the policy out. This one is insidious because the damage is done long before any claim, sitting dormant in the file. If you did not accurately describe your trade, the type of work you actually do, or your claims history when you bought or renewed the cover, the insurer can treat the policy as if it were never valid in the first place. Doing hot works you never declared. Working at heights beyond what the policy assumed. Taking on a category of job outside your stated activities. Any of these can leave you completely uninsured for the very thing you are now trying to claim on - not because of anything that happened on site, but because the contract was built on a description that did not match reality. It is worth reading your policy summary against what your business actually does, honestly, once a year, and picking up the phone to your broker the moment your work changes shape. A five-minute call now is a lot cheaper than a refused six-figure claim later.

The single pattern behind every one of these

Step back from the individual conditions and you see they all rhyme. Reasonable precautions. Risk assessments. Competent staff. Honest disclosure. Every route to a public liability refusal comes back to the same root: the policy is conditional, and the conditions are mostly just "do your compliance properly, and be able to prove you did". None of it is insurance witchcraft. It is the ordinary, unglamorous stuff a well-run trade does anyway. And that is what makes the firms who get caught out so frustrating to think about, because they are almost never the cowboys. They are decent operators who did the job perfectly well but never kept the evidence - so when the claim lands, they cannot show the precaution was in place, the assessment was done, the man was competent. The claim then gets decided not on what they actually did on site, which may have been faultless, but on what they can prove they did, which is nothing. I have written about the wider version of this in will your insurance pay out if you have a claim? and about the exact documents they ask for, and — for height work in particular — the records that decide a fall claim.

Where Complys fits

Complys exists to keep the conditions your public liability cover depends on not just met, but provable - which, as we have seen, is the part that actually matters. Site-specific RAMS for every job, so the risk assessment condition and the reasonable-precautions condition are both satisfied and, crucially, evidenced. Training and competence records kept current, so the competent-staff condition holds up under scrutiny. Photos and site notes captured against the job that show the exclusion zone, the barrier, the control that was genuinely in place, time-stamped and located so there is no argument about when they were taken. It all lives together as your construction compliance software, so that if a public liability claim ever comes at you, you are not scrambling to argue you took reasonable care with your hands empty - you are showing it. Complys keeps you compliant, and being able to prove your compliance is, in the end, exactly what keeps you covered.