Self Insurance

mattymoo

Shadowsonthehills wrote: »

Its a cleaning business, I used to clean inside public houses years ago and was very efficient at it, but just got more work piled on me.

In that case, any serious firm would not touch you with a bargepole. I'll explain.

I work in risk management for a Lloyd's syndicate carrying out liability surveys. When I visit clients I review their H&S procedures and rules for contractors etc. One of the stipulations we ask for is that they keep a record of contractors insurance details to ensure they are not employing cheapskate contractors.

All the contractor does is provide a letter from their insurance broker stating they have £x million public liability cover in place and which insurer it is with. Some firms, particularly on major sites and projects insist the insurer has a certain rating or better with Moodys / Standard and Poor etc to ensure the insurance is with a stable firm.

The potential issues you have as a cleaner are slips and trips (from floor cleaning / leaving materials around) and substances hazardous to health, controlled by the COSHH regs.
In addition, there is a potential for property damage from incorrect dilution of cleaning substances or incorrect application.

As a business person, you simply do not have the time to deal with the claims made against you. They can be very time consuming and expensive if professionals (solicitors, adjusters, professional witnesses etc) are involved.

Get the Public Liability cover (it can be pretty cheap) for £1m cover and sleep easy at night.

dacouch

I agree with Matty, if you will have any employees (Even if you put them down as self employed) or any "labour only subcontractors" then you are legally required to have employers liability insurance. The penalties for not having it in place are very harse.

The cleaning industry is renowned for producing lots of claims both Public Liability and Employers Liability Claims. Cleaning staff have a tendancy of making claims against their employers for injuries.

Without Liability Insurance in place you will not win contracts with most companies and none from any government bodies.

Shadowsonthehills

Thanks for the advice.

Wheresmydosh...I think I would feel safer with the supermarkets for some reason.

mattymoo....the only cleaning substances I use are soap and water , Disinfectant and bleach for the loos, I have an health and safety cert but not specific to this role so will get another.I do not intend employing anyone and keeping costs to a minimum, if my workload gets out of hand or my health deteriates, I think I would try to sell the customers cleaning to another firm/self employed person, if that is possible.

iceicebaby

I am responsible for maintenance contracts in the company I work and I simply would not employ anyone, cleaner, painter and decorator, catering company, anybody if they could not show me the correct insurance certificates. Nor would my company allow me to employ anyone who is not insured.

dacouch

If you generally do not have any employees or labour only subcontractors eg you use subcontractors who just provide their labour and do not work under thier own direction, then it is possible to self insure. Although I would still advise against it as if you get one slip/trip claim in my experience they average out at between £4000 to £10000 and can be much more.

You can however take steps to minimise these by working methodically, this would include making sure you have a "Method Statement" that you stick to eg when you clean a pub toilet you draw up how you work and what H&S you do and always stick to it. Make sure you put out the "Wet floor / cleaning in progress" cones. It is also an idea to make a note of the time and date you cleaned the toilet (Like they do in Mcdonalds restaurants) this can be incredibly helpful if someone takes you to court as courts really only accept paperwork as evidence and this can be helpful in defending a claim against you.

As you are a one man band you insurance would cost circa £130 (Depending on the type of contracts you have) so its worth considering for peace of mind.

Good luck with your business

Shadowsonthehills

cheers!

sorry I probabaly sound thick to those who know even a bit about insurance. If a claim is made against me and I am liable do the insurance payments go up

dacouch

They normally go up a bit but not in all cases.

What Insurers tend to do is if it was a pure unavoidable accident they sometimes do not increase it or put a smallish increase in place.

If the claim was avoidable (You would be amazed how many are) eg you paid very little heed to H&S and good business practices then they will often impose terms on the renewal eg that you have to start abiding by H&S and good business practices and are more likely to impose a bigger increase.

A court of law will normally deem you liable in a claim if you have not taken "reasonable precautions" to try and prevent it. This is why if you go into a Mcdonalds toilet they have a sheet on the wall that is signed off each time they clean the toilet. If a customer slipped on spilled soap that another customer had split Mcdonalds would use the sheet as evidence that as they had inspected and cleaned the toilet every hour they had taken "Reasonable precautions" to prevent the accident. In this case the court would probably not hold McDonalds to be liable and deem is as an unavoidable accident. If they did not have the physical sheet to show the court they would probably be held liable for the accident unless they had other physical evidence the court would accept. This is an example of how you can minimise the risks to the public which shows you that there are steps you can take to reduce the chances of a claim against you. (This is why whenever you use a toilet in a big company like Mcdonalds they have these sheets in the toilet, at the end of the day or week they go in a file and are kept in case they are needed. Bear in mind people can sue you for injury claims for up to three years after the incident)

I have dealt with very large cleaning contractors and you would be amazed how often people slip on wet floors and sue the cleaning contractor and will state there were no warning cones that the floor was wet even when they were there (I have even seen the cleaning contractors superviser sue in these cases). If you work methodically and have method statements so you always use the warning cones this can be used to help defend the claim. A court deals in evidence not hear say so they would want physical evidence. If someone sues you the solicitor will write to you asking for your Health and Safety Policy and Method Statements and any other evidence. If you cannot provide these then its almost an open and shut case for them.

Debt_Free_Chick

Shadowsonthehills wrote: »

I think I would feel safer with the supermarkets for some reason.

To my knowledge, NO supermarket has set themselves up as an insurance company. Any insurance they sell, simply has their name on top of an insurance company product.

mattymoo

Shadowsonthehills wrote: »

cheers!

sorry I probabaly sound thick to those who know even a bit about insurance. If a claim is made against me and I am liable do the insurance payments go up

Dacouch has explained it very well. Just to add that insurers look at losses in two ways - attritional and large losses.

Attritional losses are the slips, trips, cuts, strains and the like that normally come in at between £2k to £15k to settle. The insurers are looking at the frequency of these claims. For instance, if you have 10 staff on your books and there are 10 claims for that year you are a very poor risk and clearly not managing your risks. Same also applies with public liability cover but the comparison is against turnover and not wageroll.

Large losses are the major events that cost upwards of £50k and frequently approach £250-500k. Some large cases even hit £10m (the policy limits in many cases). One such was the case where the driver of a landrover fell asleep and his vehicle ended up on a track and caused two trains to collide with fatalities ensuing. A large loss in EL / PL claims often result from the large loss of earnings or dependency claims following fatalities. The accident would be your fault (if negligence is proved) but the size of the claim is not really something you could have controlled. A premium loading might be applied but it will not be as bad as if you had say 10 attritional losses.

Shadowsonthehills

Cheers....I think I will towel dry floors just to be on safe side.

One problem now is prices to quote for the job, where would I start a thread on here for that type of advice?