1. What is the insurance position if there is third party damage when acting as a consultant?
Basically the answer depends on two aspects:-
1. Who is responsible for the damage – i.e. who was negligent. 2. Was there any specific reference to liabilities within the contract?
Every person has a duty of care under the Common Law of the country towards every other person and their possessions. If you cause loss, damage, injury or death by your own negligence then you are responsible, irrespective of the capacity that you were acting in at the time of the occurrence.
A standard Public Liability Insurance covers you against your actions in the course of your business and will indemnify you against payments incurred (excluding fines), providing that you are proven to be negligent.
In a private capacity similar cover is provided by a Personal Liability policy.
It is possible that any contract you enter into may make some stipulation regarding responsibility – especially in relation to third party property. This may place or allocate responsibility but there must still be a negligent act to trigger the event.
There is a possibility that in some circumstances negligence – and therefore liability – could be apportioned between two parties involved in a single incident. A typical example could be where a Consultant is instructed specifically where to drill for soil samples – being assured by the Contractor that the area is totally clear of underground pipework. If work starts and there is something underground that becomes ruptured or severed (water or electric) then there could be a share of negligence. The Contractor would point to the fact that the Consultant should have checked the situation for himself before proceeding, whereas the Consultant would say that he only bored where specifically instructed with confirmation that the area was clear. It is likely that in these circumstances the liability would be shared equally by the two parties.
2. Levels of care and skill.
This is not always very clear from an insurance point of view and it can become a legal issue.
English law is founded on the principle of “reasonableness”, which basically says that all matters are decided based on whether those involved had acted in a manner which was considered, in their particular circumstances, to be that expected by an ordinary person – once defined as “the man on the Clapham Omnibus”.
It is rare for an insurance policy to make any specific reference to levels of care and skill but there would be an assumption that both would be adequate for the task being undertaken. Insurance policies are written on the basis of “utmost good faith” which means that the Insured has told the Underwriter everything that is relevant to the cover being sought. Obviously the Underwriter is also free to ask any suitable questions on the matter as he thinks fit.
One area where skill levels do specifically come in for consideration is in respect of Health and Safety. Under the Health and Safety at Work Act there is a stipulation that all businesses should have access to a “competent person”. This term is not defined within the Act but the Health and Safety Executive have indicated that it means a person who has sufficient training and sufficient knowledge to be able to undertake the task.
A similar situation applies in respect of Statutory Inspections of plan and equipment where it is stipulated that such inspections must be undertaken by a “competent person”.