Professional garden designers need to protect their business, employees, clients and the general public. Martin Bell gives an insight into the world of insurance

Insurance is a mystery to many people. As a result independent advice is often sought when arranging cover. You will be pleased to read that the garden design industry is regarded by many insurers as relatively low hazard and low risk, which means that insurance premiums are lower than many occupations. Garden designers generally enjoy good working relationships with their clients and so legal disputes are few in number, but are increasing.

We now live in an increasingly litigious society where an Americanised 'no win, no fee' culture is rapidly developing. In the early 1990s the highest award of court for personal injury was ilm; ten years later that figure reached <£17m. The 'no win, no fee1 culture is fuelling litigation of all types, with more people resorting to legal redress to settle disagreements. Businesses, "which have been claim-free for many years, are experiencing litigation from clients for the first time. A garden designer may be tempted to think "we've never had a claim so why insure", but it is strongly recommended that they think again.

There are two main types of cover which are essential for all garden designers: 'professional indemnity' and 'public/products liability'.

Professional Indemnity
This cover is designed to protect against the consequences of wrongful advice, design and specification. For example work may not meet the British Standard or a retaining wall may not be fit for its purpose, leading to injury, damage or financial loss.

Unlike most types of insurance, professional indemnity is written on a 'claims made1 basis. This means that it is the policy in force at the time when the claim is made which pays the loss: for example, a project may have been completed several years ago, but loss, injury or damage may arise today. It is the current insurer who picks up the consequences of past work. When arranging cover, an extension should be requested to include any past projects. The insurer will specify a retroactive date, which means they will not cover any projects undertaken prior to that date.

Public/Products Liability
This cover protects against bodily injury or property damage arising from business activities (other than advice and design). In the event of injury, damage or financial loss, insurers will investigate the cause of the accident as there may be uncertainty or even disagreements surrounding the actual cause of the loss. The cause may have arisen through a lack of clarity in the instructions given by the designer to the contractor or through the workmanship of the contractor - due to the conditions on site - or a combination of these and other factors.

Insurers may have differences of opinion regarding the cause of the loss and whether it falls within the cover of professional indemnity or public/product liability. Wherever possible it is strongly recommended that both covers are arranged with the same insurer, to avoid the possibility of a claim falling between the cracks.

Insurers rely upon the policyholders to supply information to enable them to build an accurate picture of the business - this is a legal obligation.

The most secure way to do this is to complete an application form prior to receiving a quotation. This can prove difficult if the insurer does not understand the nature of the work, especially as the standard application forms ask questions which are not necessarily relevant to the garden design industry.

Ideally, application forms should be industry specific and sufficiently comprehensive to supply all relevant information to satisfy legal obligations. The questions should include whether the designer enters into contracts to implement the design or whether they employ temporary casual labour. An industry specific form helps to clarify a number of issues to aid the designer meet what is an onerous obligation. It is important to note that insurers can, and do rely on non-disclosure and

misrepresentation to deny liability and avoid claims. The choice of indemnity limits (level of compensation) should also be considered. It is recommended that a minimum limit of A100,000 be purchased for professional indemnity and Aim for public/products liability. When deciding upon the limit it is important to take into account the size of projects, type of clients and the potential for injury, damage and financial loss arising from them.

Employers Liabilty
If the garden design business employs staff, then employer's liability is required. This cover is compulsory by law and is designed to compensate any employee who is injured while working under an employer's direction and control. Is it necessary to arrange cover when the designer employs temporary casual labour or subcontractors? The key issue is the extent to which the designer exercises direction and control, rather than how the work is carried out. An independent subcontractor will charge work on a per job basis, supply equipment and take responsibility for the work undertaken. The public/products liability policy should protect the designer against the consequences of the subcontractor if properly arranged.
By contrast, temporary casual labourers work under the designer's direction and control -becoming for all intents and purposes an employee. In this instance employer's liability cover is necessary.

Those contractors who enter into a contract to implement the design may hire plant or equipment to perform the task. The hire company would normally place full responsibility with the hirer for any loss or damage while in their possession - and hire charges will continue while the claim is settled. Even though the company may offer the option to buy insurance at the point of hire, it is the responsibility of the hirer to check carefully that it covers all risks, including theft (which some schemes do not cover).

Cause for Action
The benefit of insurance is in part the financial support of the insurer to pay compensation to a third party in the event of bodily harm, property damage or financial loss. Equally it is the insurer's ability to defend the allegations, appointing legal representation if necessary. By taking over control of the claim, much of the burden is removed from the designer, allowing them to continue to focus on their business. By purchasing cover the designer not only protects their business, but their customers, employees and members of the public.