Why Public Liability Insurance Won’t Cover Damage to Your Work in Progress
When something goes wrong on a job, it’s natural to assume your insurance will step in. But not all damage is treated equally, and understanding the difference between Public Liability and Contract Works cover can save you from nasty surprises.
Take this real-life example: a contractor was installing tiles in a client’s bathroom. During the process, some tiles were damaged, and a claim was made under the contractor’s Public Liability insurance. The insurer declined the claim – and here’s why.
Public Liability vs. Your Work in Progress
Public Liability insurance is there to protect you if your work accidentally causes damage to someone else’s property or injury to a third party. For example:
- Knocking over a ladder and breaking a window.
- Scratching a wooden floor while carrying tools through a hallway.
What it doesn’t cover is damage to the very thing you are working on. In the bathroom example, the tiles were in the middle of being installed. At that stage, the tiles aren’t considered the homeowner’s finished property yet, they are part of the contractor’s work in progress.
And because the tiles were damaged while being fitted, the loss fell into a clear exclusion in the Public Liability policy:
“Damage to the part of any property upon which you or any servant or agent of yours is or has been working where the damage is the direct result of that work.”
Where Contract Works Cover Steps In
This is exactly where Contract Works insurance (sometimes called Contractors All Risks) comes into play. Contract Works is designed to cover damage to the materials, fixtures, or work in progress that you are responsible for until the project is completed and handed over.
So in this example, if the contractor had Contract Works cover, the damaged tiles would likely have been insured. Without it, the financial burden falls on the contractor.
The Key Takeaway
If you’re in construction or a trade where you supply and install materials, it’s vital to understand that:
- Public Liability covers accidental damage to other people’s property.
- Contract Works covers damage to your own works and materials until the project is finished.
- That distinction – who owns the risk at the time of damage – makes all the difference.
