# A Guide To Liability Insurance & Our Scheme



## Shiny

Hopefully this will shine a little light on the various covers and options available to help you with the decision on what is most appropriate for your business. Apologies if i've used any insurance jargon which people don't understand, but please ask if there is anything that requires further explanation.

*Public Liability Insurance *

Whilst this cover is not compulsory, it should be considered as a necessity by anyone running their own business. Unfortunately we are living in a litigious society where people are aware of their rights to claim. Years ago, if someone tripped over your hosepipe they would have got up, brushed themselves down and walked off thinking how stupid they were for not looking where they were going. It's a different story these days and now, with the ease of access to personal injury solicitors, people will be seeking financial compensation for their injuries.

Basic protection for you and your business is available for well under £100 and will indemnify you up £1,000,000 (or higher if required) against claims for damage or injury from a Third Party (ie another person) as a result of your negligence for which you are legally liable.

There are two types of policy available for valeters/detailers, a "per capita" Liability policy and a Motor Trade Liability policy. There are distinct differences between the covers under the policy and, in the same respect, substantial differences in premium.

* "Per Capita" Public Liability *

There are quite a few Insurers who offer "per capita" Public Liability policies. These are traditionally for Tradesmen who operate without premises (bricklayers, painters & decorators, carpenters etc) and the premium is based on the number of persons, hence "per capita". Some Insurers have an extensive acceptable "trade" range under these policies and include the business description "Car Valeters".

These policies are competitively priced and premiums for one principle start from well under £100. The excess for "third party property damage" (ie the first amount you have pay towards a claim) is generally £100 depending on the experience in the trade.

Per Capita policies do have their limitations. You have to bear in mind they are generic policies for a wide range of trades and the policy is then endorsed with specific trade exclusions (e.g. depth limits for groundworkers, exclusion of tree felling for landscape gardeners etc). With regard to valeters, it is important to note the following -

*Trade Description* - I've gone through the underwriting guides of a number of Insurers and they all state the trade description as "Car Valeters" and at best "Valeters of Cars & Vans Up to 1000kg GVW", although there aren't many vans less than 1000kg's!

*Exclusion of Items Worked Upon* - the policy will exclude any damage to car you are valeting/detailing. This is not just as a result of the act of cleaning but a full exclusion and therefore any damage to the vehicle, regardless of cause, is excluded. So you have to bear in mind that whether you damage the car either by cleaning it, dropping something on it, or any other cause, you will have pay for the damage yourself.

Cover for items worked upon is available under a "Motor Trade Liability" policy (more about this in a minute) but the premium for this is over of £400 and with an excess of £1,000! On this basis, if you take out a "per capita" policy and do happen to damage a car whilst working on it, effectively you can pay out circa £1,300 of damage and still break even on the alternative insurance costs/excess of a policy including items worked upon. This is where you need to weigh up your exposure to a claim, the potential maximum cost of any damage to vehicles you are working on and affordability of the policy (i.e. the comparative cost of the two policies) and then decide which policy you require. My advice would always be to take the policy that offers the most protection, but financially this is not always feasible. If you are involved in potentially higher risk activities such as jet-washing engines or are working on high-end vehicles with a potentially high cost for any damage, then you really should be looking to include damage to items worked upon.

With regard to the business description, I have argued with the Insurers that if they are excluding damage to the item worked upon, why do they have a vehicle restriction as it doesn't matter if you are working on a car or a van when the Insurers won't be paying any damage to the vehicle anyway! They did explain that in view of the low rate of the premiums they are only looking to attract "car" valeters and consider the activities of cleaning vans etc a higher risk and not something they want to expose themselves to under the policy. Therefore under the "per capita" Liability policy, if someone trips over your hose whilst you are cleaning a car then this covered, but if someone trips over a hose when you are cleaning a van, there is no cover under the policy as this falls outside the business description.

The policy excludes any motor vehicle liability (this should be covered under a Motor Trade Road Risks policy).

So to summarise, a per capita policy is a competitively priced Public Liability cover with a low policy excess but only applies in respect of the valeting of cars and excludes any damage caused to the car you are cleaning.

Subject to an additional premium, some per capita policies can be extended to include tools cover. This provides cover for your tools and stock. The limits vary, but normally the limit is a total of £1,500 per person with a single item limit of £750. The vehicle has to be locked for theft cover to apply and overnight theft is excluded from vehicles unless it is in a locked garage between the hours of 9pm and 6am. Usually an excess of £100 applies to claims.

*Our EXCLUSIVE "Per Capita" Liability Scheme*

Having read the above, hopefully you will be understand that whilst "per capita" Public Liability policies offer great value for money, the trade definition is very restrictive, covering "car" valeters only and with low sums insured for tools, equipment and stock.

Working with members of the valeting industry, I have negotiated a facility with a leading UK Insurer that will cater more specifically for valeters and the type of work they do. The Insurers eventually agreed to my proposals and rating structure and the benefits of this exclusive scheme are as follows-

* Competitively priced "per capital" Liability Insurance

* Trade description "*Mobile Car Valeters & Detailers*"

* Business activities endorsed as "*Mobile Valeting & Detailing of Cars, Vans up to 3.5t, Motorhomes & Caravans* (provided income from vans, motorhomes & caravans does not exceed 10% of turnover)"

* Public Liability indemnity limits available are £1m, £2m & £5m

* Cover for Tools, Equipment & Stock at £1,500, £2,500 & *£5,000* with a single article limit of *£1,000* and subject to a £100 excess

* Option to include Employers Liability and Temporary Employees cover

* £100 Third Party Property Damage excess (increasing to £350 for persons with less than two year experience in the valeting trade)

To give you an indication of premium, for a valeter with at least 1 years experience requiring £1m Public Liability and £5k tools/equipment/stock, the annual premium required will be £150 inclusive of insurance premium tax.

Please note that, as with all "per capita" policies on the market, damage to "items worked upon" is excluded. Again, if you require this cover, we can arrange a Motor Trade Liability policy (further details of which are later in this post).

With regard to the Goods In Transit, the limit of £5k on the tools/stock and equipment with a single article limit of £1,000 should hopefully be enough cover for most, but if higher limits are required, again I can arrange a separate "Goods In Transit" policy if required. It is also important to note that the overnight theft is excluded between the hours of 9pm and 6am unless the vehicle is securely garaged. It does however cover theft from a locked vehicle outside these hours (for example, if you stop off at a supermarket to buy a sandwich on a way to a job and come back to find your van forced open and all your kit stolen, or worse still the whole van including your kit) and also covers the good should they be damaged in accident. If overnight theft cover is required, we can arrange a separate Goods In Transit policy including overnight theft but obviously a higher premium will apply.

*Motor Trade Liability Insurance *

Public Liability for valeters is available under a Motor Trade Liability policy which caters more specifically for persons in the Motor Trade. The premiums are based on annual turnover and wage roll figures and can cover a wide range of motor trade activities (not just valeting) and also a much wider range of vehicles. The standard policy usually covers cars and vans up to 3.5 tonne GVW and can be extended to cover various other things such as HGVs or agricultural plant. Various levels of cover are available and these are usually £1m, £2m or £5m.

As a sole trader valeter/detailer, depending on the level of cover selected, you can expect to pay around £420 with an excess of £500 in respect of third party property damage.

*Damage to Items Being Worked Upon (Care Custody or Control)* - the premium of £420 includes an extension to damage to "Motor Vehicles" whilst being worked up. You may find that some of your customers insist that your Public Liability policy covers the vehicles you are valeting/detailing and this will ensure that you are adequately covered. There is limit of £50,000 in respect of this extension which can be increased to £100,000 subject to an additional premium. As stated earlier, an excess of £1,000 applies to damage to items worked upon which means you will be responsible for the first £1,000 of any damaged to the vehicle. *(UPDATE - EXCESS REDUCED TO £500 - SEE http://www.detailingworld.co.uk/forum/showthread.php?t=64491 )*


*Servicing Liability* - the policy cover also includes Servicing Liability. This is something normally taken up by mechanics and the like and covers the consequential loss of your actions. I consider this an essential cover for anyone selling or servicing cars and an example of this would be not tightening wheel nuts properly, customer drives off, wheel falls off, car crashes etc. and the policyholder's legal liability in respect of any damage or injury will be indemnified. There is certainly a much lower exposure to claims of this nature as a result of valeting/detailing but it is still something that should be considered when making a decision on which policy to take. I guess examples of potential claims would be overspill of tyre shine on brake discs causing the brakes to fail, or perhaps overspill of polish onto foot pedals following an interior valet and so on.

It is not possible to extend this policy to include "Goods In Transit" cover and it will be necessary to arrange a separate policy if this cover is required.

*Employers Liability Insurance *

Finally, if you employ anyone, even part time or casual, it is a statutory legal requirement that you have Employers Liability in force. This is explained further here - http://www.hse.gov.uk/pubns/hse40.pdf

Employers Liability indemnifies the policyholder against any injury or disease suffered by their employees during their course of employment. Again the employer has to be legally liable for the injury or disease, but it is often the case that courts rule in favour of injured party where employees are concerned. Obviously you have a duty under Health and Safety requirements to provide adequate training, protective gear and so on to provide a safe working environment for your employees, but a chemical splash to the eye could result in a claim and it will most likely be successful due the employer failing to supply and insist on the wearing of the appropriate protective clothing/goggles, there could be back injuries due to lack of training on lifting procedures, injuries due to improper use of machinery as a result of insufficient training and so on. It's a minefield!

Both the per capita and the Motor Trade Liability policies can be extended to include Employers Liability at an indemnity limit of £10,000,000. If you have employees, the Public Liability Insurance also extends to include the actions of your employees.

*Goods In Transit*
If you require more than the £5,000 or a single article limit higher than £1,000 provided by under our Liability Scheme, or wish to include overnight theft, or opt for the "Motor Trade Liability" policy, we can arrange a separate Goods In Transit policy. Premiums tend to start at around £150 with a £100 excess, depending on your location, limit of indemnity and if overnight theft is required. If overnight theft cover is required, a 20% co-insurance clause will apply after the deduction of the policy excess. For example, if you had £2100 of kit stolen overnight, the insurers would deduct the excess of £100 and then a further 20%, therefore the settlement would be £1600.

Please feel free to ring to me if you are interested in taking out a policy and require any further information or a quotation. My contact details can be found here - www.valeters-insurance.co.uk/contactus.htm


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## matt

Good post LLoyd! just a question, under the motor traders policy you state that a valeter/detailer can expect to pay £400 plus approx £500 excess but then in the next paragraph you state a £1000 excess for damage to property. Am i getting mixed up between the two excess's?

This section

As a sole trader valeter/detailer, depending on the level of cover selected, you can expect to pay around *£420 with an excess of £500 in respect of third party property damage.*Damage to Items Being Worked Upon (Care Custody or Control) - the premium of £420 includes an extension to damage to items being worked up. You may find that some of your customers insist that your Public Liability policy covers the vehicles you are valeting/detailing and this will ensure that you are adequately covered. There is limit of £50,000 in respect of this extension which can be increased to £100,000 subject to an additional premium. *As stated earlier, an excess of £1,000 applies to damage to items worked upon which means you will be responsible for the first £1,000 of any damaged to the vehicle.*


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## Shiny

The standard third party property damage excess is £500. So if someone was walking along carrying a £2k laptop, tripped over your hosepipe and broke his laptop, you would pay the first £500 and the insurers would pay the remaining £1500.

The £1,000 excess applies to "items worked upon". So if you were buffing paint and burnt through and the repair job was £2,000, you would pay the first £1,000 and the Insurers the remaining £1,000.

Hope that clears it up for you.


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## matt

Yeah thanks, its the wording 'third party property damage' that threw me because technically the customer and his car could be seen to be the third party that has suffered damage/loss etc. 

Insurance is a minefield at times!


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## GateKiller

Good Write up and very interesting 

Are these fee's annual or monthly?

Stephen x


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## Shiny

The premiums indicated in the post are annual premiums. They can of course be paid by monthly instalments though.


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## The Detail Doctor

Just wondering is there is a "job by job" scheame? For those of us that only do it at the weekends?


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## Shiny

I'm afraid not Mark, Liability policies are annual policies. But if you break the cost down on a cost per job basis, it doesn't work out very expensive (unless of course you only do one or two jobs a year!).


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## ayrshireteggy

Only just got round to reading this . Excellent guide and it gives a great description of policies available and what they cover. Cheers. :thumb:


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## freon warrior

I have just taken out some cover with Lloyd and have to say I am very happy with the advice he gave.


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## Shiny

Thanks mate, much appreciated. :thumb:


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## astra-bertone

out of interest who underwrites the policies you offer? I work in liabilty motor claims for NU


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## Shiny

Various Insurers, depending on which policy. We actually have an NU Wholesaler's scheme for the GIT, cracking little policy.


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## jezport

I am about to start mainly valeting motorhomes, will this type of policy cover me?


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## Shiny

If it is mainly Motorhomes, you will need the "Motor Trade Liability" policy as the "Tradesman Liability" policy will only cover up 10% of your business being Motorhomes.

The damage to items worked upon applies in respect of "Motor Vehicles", so i'm pretty sure this will include Motorhomes, but i can check this for you to be certain. If you are also working on static/mobile caravans, again the Public Liability won't be a problem, but the damage to items worked upon won't be covered for these as caravans are not classed as Motor Vehicles.

Please feel free to give me a ring if you would like to discuss this further.


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## firebladerider0

Blimey im so glad i read this post as i wouldnt of been covered with the policy i was gonna take out.
Anyway im am just starting up as a mobile valeter/detailer & i was wandering if there is a policy about which includes everything i need ie: van, public, git & the motor traders as i will hopefully be working on cars,vans & HGV's. 
Cheers Steve.


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## Shiny

Give me a ring Steve, we can sort all those out, including work on HGVs.


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## BradL

I think everyone here has been a bit mislead...

Public Liability Insurance for car valeting: This covers you against a claim from members of the public – or a customer – for death, bodily injury or damage to their property, which in your case would include that top of the range Aston DB9 or Porsche 911. The extent of the car valeting cover you need depends on your business and the types of vehicle you are working on: £1m – £5m cover is the usual level of cover, and covers you for any accidental damage when working on a vehicle.


?


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## Shiny

Nothing misleading BradL, "Tradesmen" type policies specifically exclude "damage to property being worked upon".

To cover the "care, custody & control" aspect, a valeter/detailer will need the appropriate policy with a cover extension and cover is normally limited to £50k or £100k in this respect.

Similar endorsements apply to a range of trades, carpet/window cleaners exclude damage to the item being cleaned (unless on certain cleaning schemes), carpet fitters exclude damage to items being fitted, Glass installers exclude damage to the glass being fitted etc..


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## [email protected]

BradL said:


> I think everyone here has been a bit mislead...
> 
> QUOTE]
> 
> i also read that this morning and am left a little confused by it all? am i right in thinking that it covers the vehicle being worked on, in the case of accidental damage?.
> would be good if someone can answer this for me as i am looking to take out insurance to cover me for mobile valeting! :thumb:
> 
> shiny you responed as i was typing this...


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## BradL

So really, all is needed is public liability - to be covered for any damage to cars...

:thumb:


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## Shiny

...but not the car you are working upon, if it is written on one of the many sub £100 Tradesman Liability policies that are available.

For the car you are working on to be covered, you will need a more specific Public Liability policy that can be extended to include "Care, Custody or Control", which then includes damage to motor vehicles whilst being worked upon.


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## M.J

SHINEY -Its Mike with the Cosworth i spoke to you today(fri) thanks for the very descriptive phone call however i,m still a little or very confused lol 

The lower end quote you gave me for 'custody care and control' is where i,m lost .
Whats the major difference between this and 'motor trade policy' quote? 

Am i on the right lines to say that motor trade policy covers the complete well being of the vehicle regardless of anything to do with your 'blame or wrong doing'. i.e the vehicle is crashed into by a cyclist etc etc 

the custody policy is purely covering your works on the vehicle only ?? 

sorry if i,m way off especially after reading the thread (which i,m about to do again) AND calling you lol - 

, if i am on the right lines would custody care and control be quoted on vehicle valuation say £25k max for instance? 
i,m basing my questions as a mobile valeter/detailer

on my premises (my house ) can custody care and control still be adopted ? 
many thanks 
mike


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## Shiny

No worries Mike, i appreciate it was a lot to take in. We basically looked at two scenarios, so i'll try and sum it up -

Mobile
If operating as mobile, with the way you are looking at running the business/types of customers on your books, you can probably get by without the need to pay out for a policy to drive customer's cars. Just ensure you have the relevant business use under your car policy to get you to your destination and, if a car ever needs moving, ask your customer to move it for you.

You can then look a Public Liability Insurance with the damage to items worked upon (care custody control/"CCC" for convenience). So if someone trips over your hosepipe or you are unfortunate enough to damage a bonnet on an Aston Martin when polishing, then you are covered. You can select an indemnity limit of £50k or £100k.

In this instance, if a newspaper boy cycled up the drive and hit the car, it will all be covered under your customer's own insurance (who will then try and claim it back off the liability policy of the newsagents dah de dah...) as you have not moved or parked it there. You will only be legally responsible for any damage to the vehicle directly caused by you, which will be covered by the CCC cover under the Liability policy.

Premises Based (ie garage at home)
From the minute you are left in control of a vehicle at your own premises, under "bailment", you are legally responsible for the safe keeping of that vehicle and therefore responsible for any loss or damage to it.

Vehicles at a trade premises must be covered under the "own/customer's vehicles at premises" extension of a Motor Trade Road Risks/Motor Trade Combined policy. There is where it gets a bit complicated... because of the potential cross over issues with the CCC under the liability insurance, quite simply the liability insurance excludes any CCC where a premises is risk concerned, so if this cover is needed, you will need Motor Trade insurance.

If your work was split between mobile & premises, you can still chose to have just the Public Liability Insurance, but the CCC will only apply in respect of the mobile work and this will be excluded in respect of any vehicles at your premises.

So, as mentioned, to cover customer's vehicles at your premises, you will need to take out the relevant cover under Motor Trade policy. In general, Motor Trade Road Risks policies exclude any vehicles at your premises or parked within a quarter of a mile from your premises, but cover for vehicles at Trade premises is available as an extension/add on to the Road Risks cover.

You will need to consider the maximum value of any one vehicle you may drive and have at your premises (obviously the higher the value, the higher the insurers exposure, the higher the premium). In your case we chose £25k. So you will now have policy that will allow you to drive customer's vehicles in your possession for valeting/detailing purposes up to an indemnity of £25k.

You then need to extend the cover to include "vehicles at trade premises". As you will only have one vehicle there at a time, again a £25k indemnity limit will suffice. This will then cover the vehicle whilst in your care so if it gets stolen, or the newspaper boy crashes into it, you are covered under your own policy (again the Insurers will try and get their money back from the newspaper boy, but you own insurers will pay for the repairs in the meantime).

You can then extend the Motor Trade cover further to include Public Liability Insurance, eliminating the need for a separate Public Liability Insurance policy.

Now generally speaking, Public Liability cover under a Motor Trade policy excludes CCC, so you still won't get cover for damage to items worked upon under the Public Liability section of the policy. However, I've been into this in quite some depth with the underwriters, and the particular policy we are looking at for you actually provides cover to vehicles at premises as an extension to the Road Risks cover. In view of this, they will cover damage to items worked upon, although they treat it as an "accident" as such and, as well as being subject to the excess, a claim will affect any no claims bonus you have earned under the policy.

Hopefully this clears things up a bit for you, although it was a bit of a long "sum up" 

We did discuss this on the phone, but unfortunately sometimes there is a bit of a misconception that whilst a customer's vehicle is in your care (whether in a garage at home or at a business unit/premises), the customer's own insurance will pay for it. Let's say you are fortunate enough to have a customer's Ferrari at £150k in your garage for a few days. You wake up in the morning for an early start, open the garage door to find it gone. As mentioned, under bailment, you have a legal responsibility for the safekeeping of that car, so you will be one the one needing to find £150k to pay for it. There _is_ of course the possibility that your customer's own Insurers may well pay him for his loss, so to a certain extent the customer's own Insurers may well pay for it! But they are then £150k out of pocket when the legal liability lies with you, so they will come knocking on your door wanting their money back. We all take risks, but personally I think that's far too big a risk to take, but the on the other hand insurance to cover exotics and the like is never going to be cheap. So if you take out a policy covering £25k's worth of vehicle, make sure you detail the £150k Ferrari at the customer's premises and don't for the love of god even try and move it 2ft, or make sure you are adequately covered and be prepared to pay someone like me a healthy chunk of your profit


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## M.J

i understand it now lol !! Great post Shinny that has cleared things up for me 97ish %

So there are choices depending what exactly are the finer details in respect of where and how you are working (i.e) intending to move or not move vehicles , and of course the vehicles value in question . 

From going through this its seems for me personally i,d be after PL with CCC (damage worked upon) -your Astin Martin example

Any work done at my domestic premises is not covered . Would the PL also NOT apply in this sitiuation too?

Many many thanks 

mike


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## Shiny

Public liability will apply at your home address (as long as you have a suitable policy) so if you accidentally jetwashed a kid walking by and took his eye out, youd be covered. You just wont get CCC under the public liability at your home address.


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## Beau Technique

Shiny said:


> Public liability will apply at your home address (as long as you have a suitable policy) so if you accidentally jetwashed a kid walking by and took his eye out, youd be covered. You just wont get CCC under the public liability at your home address.


Either way that would be a giggle:lol:

Think I may need to increase my vehicle indemnity soon so will be on the blower in the next few weeks Lloyd lad:thumb:


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## M.J

Shiny said:


> Public liability will apply at your home address (as long as you have a suitable policy) so if you accidentally jetwashed a kid walking by and took his eye out, youd be covered. You just wont get CCC under the public liability at your home address.


ok thanks, that sounds very reasonable

so with a no claims bonus , 32 years of age what kinda rough quotes would i be expecting ? PL with CCC including PL at my home address

I,ll contact you at work if easier , just being a bit cheeky tbh 

Thanks once again , very informative as usual


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## Shiny

Mike, i think i mentioned it on the phone last week, but give me a ring when you are more or less ready to go and you have a better idea of how your business is going to be set up, then i can get some presentations typed up based on exactly what you need and then send them off for quotes.

I'm really supposed to do rough quotes, god bless the FSA...


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## M.J

ok thanks Lloyd thats a great help i,ll ring you when i,m ready 

just another query , it come to me as i was on my round this morning watching a guy wash his car outside his house but in the street/highway

If a mobile valeter/detailer is faced with this 'often' would that be a possible area that is still covered as above. Public liability with vehicles worked upon. ?

It sounds like your doing fantastic work with the underwriters , getting across good details of what your likely to face day to day and have particular cover for given scenarios and circumstances 

cheeRS LLoyd 
Mike


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## Shiny

If it was outside the valeters own address, then the Public Liability will apply but not the CCC.

If it was outside a customer's address, then both the Public Liability and the CCC will apply (provided of course you have a policy which includes CCC).

Again you won't be able to move or drive the vehicle unless you have Motor Trade Road Risks cover in place.

Not really an insurance issue, but a valeter should really do a risk assessment if he has no choice but to work on the road and weigh up the risks and hazards before taking on a job for his own safety and well being.


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