Last year, we were contacted by a prospective client who was desperate to obtain employers' and public liability (EL and PL) cover for their work as site clearance contractors.

Essentially, this involved not only shovelling and sweeping of sites but, more importantly, the sorting and shredding of various metals.

After much effort, we were able to secure a quotation through Lloyd's at some £12,000.

This year, after allowing for the increase in turnover and wage roll, the existing market required a premium of £20,000 which we were able to improve upon and provided confirmed terms with another carrier at £17,500.

Although the client informed us that he was also seeking quotations from other sources, we were still reasonably confident of retaining the risk following our broking exercise.

We were absolutely flabbergasted, therefore, to be told that the client had obtained EL/PL cover for a staggering £1,000 in total.

Allowing for the fact that the client employs somewhere in the region of 12 operatives, simple mathematics will give an indication of the cost per head.

The client is unaware of the identity of the insurer, so we have obviously suggested caution. But, as the client quite rightly states, as long as the cover is suitable for his requirements and the insurer is financially sound, then they have made a significant cost saving.

I know there is talk of a softening liability market but, for heavens sake...!

David Langley
Langley Horrocks & Hart
Insurance Services