New ways to generate income could end up a financial nightmare

Public Liability claims costing Westmeath professionals thousands as average claim reaches €25k

As the nation waits for the economy to pick up and hopes that individuals with entrepreneurial spirit can lift us out of this recession, thousands of enterprising people throughout Westmeath are looking at other opportunities to generate or supplement their income.

People from a variety of professions throughout the country are looking at going out on their own by engaging in consultancy or contract work to replace or boost their income in these challenging times. While the proactive approach of these teachers, plumbers, engineers, etc is commendable there is real concern that these people are leaving themselves open to a serious financial risk– the public liability claim. Anecdotal evidence has suggested a significant upsurge in demand for public liability insurance as awards granted rose 8 per cent between 2007 and 2008 and awards remain at current levels in 2009 numbers as the economy hardens and consumers become more claims-conscious.

Seán Burke of warned, “Overall there were 25,919 personal injury claims in 2009. The cost of the insurance isn’t usually the issue…who would hesitate on purchasing cover for an average of €140 when the cost of non-insurance in the event of a claim could cost €25,000. In Westmeath, we have found that the real issue is awareness. If a teacher decides to give grinds a couple of hours a week he/ she may not be aware that if a student trips over the computer cable which they are using during the tutorial, the teacher is then liable for a claim. It’s a harsh reality but public injury board figures have shown that what might start out as a project to make a little extra cash can end up actually costing the person thousands and leaving them in severe financial turmoil.”

In Dublin, Cork, Limerick, and Tipperary the highest number of public liability awards were granted in these areas.

In contrast however, in Leitrim, Monaghan, Roscommon, Cavan, and Offaly the lowest number of public liability awards were granted in these areas.

Public liability insurance is required by all those who engage in some degree of self-employed work for a number of reasons:

1 In the current tougher times, there is the real possibility that someone may make a claim against you.

2 Most public bodies require PL cover before giving out any contracts or even gaining access to buildings or other facilities. Even hiring a venue room often requires proof of public liability insurance cover.

3 Many newly unemployed professionals now work for larger organisations, particularly multinationals on a contract basis. These larger companies, usually multinationals, require the consultant to carry their own public liability cover.

According to Sean, “While the requirement can appear onerous, policies take only 10 minutes to obtain and can be issued on line. Professionals, such as IT consultants have traditionally worked on a contract basis for a numbers of years within the IT sector and are generally required to have public liability insurance in place before being offered a contract. This work pattern now appears to have spread to other sectors.

With the growth in claims and Ireland’s record for substantial damage awards in the courts, there is a greater emphasis on having public liability with even innocuous and non-hazardous activities requiring cover. Our household policies generally cover any private related issue around the house, but exclude commercial activity, particularly where that activity is carried on somewhere else.”

Case in point: Public liability insurance claims

1 An engineer is visiting the site of a client and is setting up measuring equipment. A member of the public falls over the measuring equipment which causes injury. A public liability claim is taken against the engineer.

2 An IT contractor is working on a company premises updating computer equipment. The IT contractor spills their cup of coffee into the computer server. The company makes a public liability insurance claim against the IT contractor.

Seán concluded, “The above are just a couple of examples to give people an idea of the situation where a public liability claim can arise. However there are hundreds and thousands of variations which means that this is a nationwide issue which affects people throughout Westmeath and needs to be addressed. Particularly in the current economic climate a public liability claim could be the financial ruination of the individual involved.”


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