[ Focus: Insurance]
If an accident occurs resulting in an injury to a worker, the potential financial
penalties can be extremely severe
generate from feed-in tariffs. While it is reasonable to give an indication of the financial benefits that could accrue from a solar PV system, it would be unwise to try to quote actual figures because if you get the figures wrong, you could be accused of mis-selling, which could result in a customer taking the matter to Trading Standards.
Team work Another consideration is the possibility of needing to work with other tradespeople, and the potential for claims to arise out of work that they have carried out on the project. If you are sub-contracting work – for example, bringing in a plumber to install a boiler – you, as the main contractor, will be responsible to the customer both for their work, and for their actions if they cause damage or are responsible for an accident during the course of the work. It is vital, therefore, to ensure that sub-contractors have
and with the government proposing further reductions to solar PV tariffs with an eligibility date from 1 July 2012, there could be another rush. Regardless of pressure from customers, it is essential that full account is taken of health and safety issues, because any failure to comply could, in the event of an accident, result in liability. A potential risk, particularly for electrical contractors
diversifying into solar installations, arises through the responsibility they carry for the design or specification of the installation, rather than its physical installation. Some might assume that this is adequately covered by their public liability (PL) insurance, but they would be wrong. If a solar roof panel fell off and injured someone because it was incorrectly fixed, that would be covered by PL; however if a fault develops which does not cause damage but arises from the fundamental way in which the system was designed, that would not be covered. Where there is any design element to a job – and it could be argued that even deciding where a light switch is positioned constitutes design – a contractor should always consider professional indemnity (PI) cover that offers protection in the event of a claim for loss arising from neglect, error or omission due to professional negligence. Even with PI cover in place, something that a contractor cannot insure against is a customer’s pure financial loss – as in the case, for example, of them not achieving either the level of cost savings that they had been promised from a solar PV system, or the income their system will
their own public and, if relevant, employers’ liability cover in place. This is something that is very easy to overlook when you have maybe worked with the same firm or individual on a long-term basis, but it is sound business practice to request that they supply evidence of their PL cover on an annual basis. If they don’t have cover, or if for some reason their cover has lapsed, and they are the cause of a liability claim, it is you as the main contactor that could be left holding the financial baby. A contractor must also look closely at the sub-contract terms in place and ensure adequate indemnities are provided by the sub- contractor to cover their work, in order to avoid contractual arguments over responsibility for damage. This must also make clear responsibility for testing the system before it is set to live. In the past, solar installations have generally been carried out by specialist firms, but increasingly – and particularly with a lack of general domestic work – it is a service that electrical contractors are looking to offer. With customers looking for ways of cutting their energy costs, it is a growing market. For those contractors looking to diversify by moving into that market, it offers an area of opportunity – but beware the potential for increased risk!
May 2012 ECA Today 65
SHUTTERSTOCK/LISA F. YOUNG
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