Most letting agents in London now require their contractors to carry £5M Public Liability. Some still accept £2M. The difference matters more than you’d think.
What Public Liability actually covers
If a contractor damages something — scratches a tenant’s front door, floods a kitchen, drills through a hidden pipe — the contractor’s PL pays to fix it. If the contractor doesn’t have enough cover, the agent gets sued and the agent’s insurance goes after the contractor’s insurance. If the contractor has no insurance, the agent’s insurance pays, then sues the contractor personally.
The realistic worst case
A burst pipe in a flat above an office. The water damages the office below — server rack, customer records, electrical equipment. £5M of cover covers the worst plausible commercial claim. £2M gets close but starts to bite in the worst 5% of cases.
Why £5M has become standard
Most block-management policies and large residential portfolios (Foxtons, Savills, Hamptons, large corporate landlords) require £5M as a minimum. If you’re a letting agent with 5+ managed properties, your largest client almost certainly requires £5M. If you only take £2M-certified contractors, you exclude half the market.
What it costs the contractor
Going from £2M to £5M on a trades PL policy adds roughly £30-£60 per year. Not a real barrier. Most contractors already have £5M if they’ve been properly advised.
How to verify cover
Ask for the certificate. Then check three things:
- The policyholder name matches the contractor’s trading name (not their personal name)
- The cover limit is £5,000,000 (not aggregate, not “£5M any one occurrence” — get the wording)
- The expiry date is in the future
Then ask: does the policy cover property being worked on? Most basic PL policies exclude damage to the property being repaired — the door the locksmith is fitting the lock into, the radiator the plumber is replacing. This is the biggest gap in UK trades insurance. Get the schedule, not just the certificate.
What Vellogy does
Every contractor on the network carries £2M+ PL minimum. We filter by min_insurance_gbp=5000000 when an agent specifies the higher standard. We also carry our own £5M PL as the dispatching party — two policies in play for any incident.