What is insurance for? Our basic policy provides "public liability" cover for residents' associations and management companies responsible for private roads and estates. If someone claims compensation from the association or company, the insurers will deal with the claim. That is, they will either settle it or dispute it; and if they dispute it they will pay any compensation awarded by the court, and legal costs. The most common sort of claims are those arising from accidents, and the most common sorts of accidents are those caused by defective road surfaces, or branches falling from trees.
Private roads are not particularly risky places. But it's important to bear in mind that:
Legal liability may arise without moral fault. The fact that someone has not, by ordinary standards, behaved irresponsibly or culpably, does not mean they cannot be held legally liable in the event of an accident.
Public liability insurance thus make sense. Our basic policy offers levels of cover of £2M or £5M. Also included is £25,000 of property damage cover, designed to protect signs, gates, fences, security equipment and street furniture. (It doesn't cover damage to trees and plants, nor to the road surface - this is bound to wear out eventually, so there isn't a risk to be insured against.) Underground pipes, cables etc are covered if the residents' association is responsible for them, though this isn't usually the case (the exception is surface water drains) since they are generally the responsibilty of the utility companies.
Finally, our basic policy policy also includes £100,000 of legal expenses cover. These "extras" are bundled with the public liability insurance because it's much cheaper to provide cover in this way - separate property damage and legal expenses policies would typically cost much more.
What about "D&O" insurance? Directors' and Officers' ("D&O") insurance, known as "Trustees Indemnity" cover under our new scheme, protects company directors and the committee members of an unincorporated association against personal claims against them. Example: a company director signs a contract for some work on the road. The work goes badly wrong, and the dirctor is accused of being negligent and asked to compensate the company for the loss it has suffered.
Whether you need D&O/Trustees' Indemnity cover is a matter of judgment. Residents may be happy to give up their time to act as a director or committee member of their residents' association or company, but may feel that they should not have to run a personal risk, and that this cover should therefore be provided. This seems a reasonable request; and providing insurance cover should encourage others to volunteer.
Our Trustee Indemnity cover is available as an extension to our basic policy (it is not available separately) and provides levels of cover of £100,000 or £250,000.
Some common features of roads Unsurfaced roads: the insurers usually accept these at standard rates, subject only to an increased excess for third party property damage. Pumping stations for foul water: the insurers usually accept these at standard rates subject to conditions relating to maintenance. Bridges: the insurers may in their discretion offer cover to a road with a bridge, but detailed information about the state of the bridge will be needed so that the insurers can assess the risk. Other hazards, such as lakes and streams: the insurers will expect to see details of the risk, and an indication of how it is to be managed.
On the following pages you can ask for further information about insurance, and/or a quick, no obligation quotation. Premiums start from £261 + tax (= £274.05) for our basic policy, for roads with up to 25 properties, and £110 + tax (= £115.50) for Trustee Indemnity cover. We believe that our scheme offers high quality cover at an extremely competitve price.
© PRS Ltd 2009
