Sign Installation and what's covered

When it comes to insurance it's what's not covered that causes the problems.

When installing signs liability is really the bit that we are interested in, but before we discuss this in more detail let's get the simpler bits out of the way.

If you have a shop policy the chance that this covers your activities for the installation or maintenance of signage is rather remote; in fact if you are installing and you have a shop policy (also known as a retail package) you need to be very concerned.

Are you working from an office, arranging installations and only have an office policy? The effectiveness of this type of policy depends on how you employ people to do the installs, and remember you still have an obligation to these people as well as ensuring that your own exposure is covered.

Now for the interesting bits - this is a rather large subject but I will try to keep it straightforward by using a fictitious job that should encompass much of the exposure you will probably come across on a daily basis when working away from your premises.

The contract is to install a number of signs at "Sparks and Mensa" the new alcohol emporium at the airport. You have manufactured all the signs and you expect the job to take you around two days to complete. The job consists of internal signage, including the application of vinyl graphics on windows and internal walls and outside you have to install all the signage including a large illuminated sign on the roof.

You are a small business and this is a size-able job. 'Bill' your employee can't do all the work himself so you have to get external help, which means you need someone to assist Bill with the installation and also an electrician. You agree an hourly rate with 'Ted' who has done installations for you in the past and you also agree a price with 'Sparky & Co', the electricians.

What we have here is Bill, who is your direct employee and is therefore PAYE, Ted however is a casual employee, he provides labour only and will be termed as a "labour only sub-contractor" (LOSC), but because he is your responsibility on site you will need to be covering both his public liability and employers liability. Sparky & Co however will provide materials to do its part of the job (other than the signs obviously), as well as any employees required, it will provide its own insurance and in the event of any plant requirements will normally hire these itself. Sparky & Co is what is termed as a "bona fide sub-contractor" (BFSC).

So you now have a PAYE, a LOSC and a BFSC, okay, so why is this important and why must you understand what your policy covers?

There are generally three types of policy, Per Capita (based on the number of people you have), Liability Only (based on wages and turnover) and then the one that most businesses would have in the sign industry, Liability Insurance as part of a Commercial Combined Policy and that is the one that we are going to be referring to here. As far as insurers are concerned PAYE and LOSC are much the same thing, you operate on a "master & servant" basis with them, i.e. Bill and Ted do what you tell them to do, while Sparky & Co look after itself. (By the way if you carry out work away from your own premises then your insurer needs to know).

Bill and Ted arrive at the airport and unload the van. Luckily most of the work is being carried out inside the duty free area, so they don't have too far to walk. However, we know from experience that Bill, Ted and many sign businesses will now be in dangerous territory, because the chances are that your insurance policy will exclude work in such areas. It will also exclude work on or in: Power stations or nuclear installations/establishments, oil, gas or chemical refineries bulk storage production premises, mainframe computers or rooms containing mainframe computers, aircraft, aerospace systems or hovercraft, watercraft other than work not involving the use of heat on or in watercraft in docks, harbours, boatyards or inland waterways. Railways and airports, unless the work is within the terminal building, departure lounge or public area. Airside in the open is excluded, as is work underground or underwater.

Anyway, at this point Bill and Ted are getting on fine and starting to plan out where all the signs are going. Bill starts applying some graphics using his trusty hot air blower, so what's the problem there. Most policies will have a heat warranty that applies when such equipment is used away from your own business premises - and this means that your policy will have a list of 'types' of heat that would be excluded, this generally starts off at the top with such things as oxy/acetylene, the as you get to the bottom you will find lurking your hot air blowers and hot air guns - meaning the very thing you use everyday is excluded! (The SignElite policy doesn't have this exclusion by the way) Make sure when arranging your insurance that the insurance company is fully aware that you use heat guns and bowers, the exclusion will be removed.

Ted is earning his keep by applying some graphics to a display car that is being used on the opening day of the store, however he has got slightly carried away and while using his trusty hot air gun (which is probably not covered unless you have made sure your insurers are aware of it), he has slipped with the knife and left a large cut down the paintwork. Most public liability policies exclude items being worked upon - and yes that means damage to the car is not covered. So far Bill and Ted are not having a good day. If you are working on cars, make sure your insurer knows about it.

Time to install the large roof sign. Bill and Ted can easily get to the roof using ladders or tower scaffold, but the H&S Police are on the scene because it's an airport and getting to the roof just won't be that easy, so bring on the cherry picker. Luckily access is easy and nowhere near the terminal building, but there's a problem. The job is about 12 metres up and although the cherry picker reaches, your insurance probably doesn't.

Different insurers have different height limits, these vary and you need to be aware of what yours is. The standard height is usually 10 metres so in the case of the cherry picker use, you will have now breached the terms of your policy. This can be extended, but it will cost you. However if you are regularly working at height it could be a good idea to add it as a permanent extension to your cover. If you are only at height occasionally it's worth considering this extension only as and when required. Speak with your insurer or broker to see which will be the most cost-effective route for you.

With all the issues of height out of the way the next problem is the cherry picker itself, yes more problems! Many assume that once they hire an item of plant or machinery it is automatically insured for loss or damage. Wrong! Unless you have specifically insured the item of plant with the hire company or put it on your own separate plant policy then the chances are you will not be insured. That means if the cherry picker goes walkabout, or rolls away then the loss is going to be down to you. To make matters worse, there are different conditions of hire such as CPA and HAE which detail exactly how you are going to reimburse the hire company, and depending which conditions apply you might just find yourself further out of pocket.

So to recap, when working away from your own business premises you need to make sure that your insurers are aware that:

• You are actually working away from your business premises
• You are using the services of both labour only and bona fide subcontractors
• You could be working on excluded premises
• You will be using heat in the form of hot air blowers and heat guns
• Your policy may need extending to include the items you are working on
• You may be exceeding the height limit applied to your policy
• You need cover for any hired-in plant

It would be best if you have the right policy in the first place; the shop or office policy isn't going to cover installation or maintenance! There may be other areas where your insurance cover could be weak, but the above are the key areas you need to consider.