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When it comes to property damage and person injury, the greatest risks to a business are often present when working in hazardous locations.
It may not be such a surprise then that obtaining insurance for work in these locations is not always easy.
Whenever you take out a public liability insurance policy for your business you will be asked about such locations, and in this guide we’re going to take a closer look at the issue.
What is a hazardous location?
Each insurance company will have a slightly different idea on what constitutes a hazardous location, but generally many of the same locations will pop up.
Anything to do with mining is generally considered to be hazardous, along with areas that see very large amounts of foot traffic, such as airports and railway stations.
For a location to be considered hazardous it does not necessarily need to pose a physical danger, such as a mine site or an offshore oil rig.
Other locations that can be considered hazardous include mainframe computer installations, mainly due to the fact that a relatively minor mistake could trigger an enormous claim.
The following list details some of the common locations that the insurance companies will want to know about:
- Railway Stations
- Gas Rigs
- Oil Refineries
- Chemical Refineries
- Mainframe Computer Installations
- Power Stations
- Major Infrastructure
Not all insurance companies will be concerned about all of the areas listed above, and some insurers will be concerned about areas in addition to those listed above.
If you work in a location which you think may be considered hazardous or high risk, it’s important to let you insurance broker know.
How does this affect my insurance?
If your insurance provider excludes any of the high risk locations listed above, you will not be covered whilst working in those locations.
Most insurers and brokers will specifically ask you about the locations as well, and if you answer incorrectly you’ll be breaching your duty of disclosure, which can have serious consequences.
Whilst the majority of the mainstream insurers do not cover high risk locations, there are specialist insurers and underwriters who will offer cover.
In order to access these specialist insurers and underwriters you will generally need to use an insurance broker, as most of the underwriters do not deal direct with the public.
Getting the right cover
No matter how hazardous or high risk your work locations may be, there will be an insurer or underwriter somewhere who is willing to offer cover.
Cost may be an issue however. For example you could probably find an insurer who would cover you for gold mining on the moon, but the premium would be out of this world (pardon the pun).
When talking with the insurance company or broker it is important to give them the full story on what you’re doing.
Whilst this may mean you pay more for your public liability insurance, at least you will know that you and your business are properly covered.
If you and your business do operate in hazardous and high risk locations the best option is to speak with an insurance broker. Preferably one who has experience with businesses similar to yours.
An insurance broker will be able help you to identify any hazardous locations and activities within your business, and then find the right insurer or underwriter who can assist.
A good insurance broker will also look deeper at exactly what type of activities you are undertaking.
For example you may tell a broker that you are working on mine sites, and he or she simply places you with a specialist insurer at a much higher cost based on the mine site work.
But if they had dug deeper, they may have learned that you only work on constructing the onsite accommodation and actually have nothing to do with the mining activities.
Whilst this is still classed as a hazardous location, some insurers will offer you cover at standard rates provided that you are only working on the accommodation, which can save you thousands in premiums.
As you can see, it pays to use an insurance broker who takes the time to properly understand your business and the activities that it undertakes.