Public Liability Insurance

Public Liability Insurance

The Casual Trading Act 1995, as it was originally enacted, does not include any reference to public liability insurance. This situation changed in 2006 with the introduction of statutory guidelines that were inserted as section 6(a) via an amendment to the 95 Act.

The Statutory Ministerial Guidelines state that insurance should not act as a barrier to entry for casual trading, and if traders are obliged to hold public Liability Insurance, a local authority should identify the risk to the local authority or the public.

Statutory Guidelines

Guideline 12

Insurance

The decision to take out insurance should be one for the trader. Conditions in licences regarding insurance should not act as a barrier to entry for casual trading.

Many local authorities state that traders should have public liability insurance. However in most cases no explanation was given for this beyond stating that their insurers recommended this. If traders are to be obliged to take out insurance there should be verifiable evidence that traders not having insurance is the cause of loss to local authorities and/or members of the public. If it is the case that local authorities feel that the actions or negligence of traders might result in legal action being taken against them it may be possible for the local authorities to enter into a legal agreement with traders whereby they the traders agree to be responsible for their own actions or negligence.

The Services Directive

In 2009 further guidance was issued by the Dept. of Enterprise Trade and Employment with regard to the implications of the Services Directive on casual trading bye-laws. The Services Directive clarified the circumstances in which a local authority may require a market trader to hold public liability insurance. A market trader is only required to hold public liability insurance if a local authority identifies “a direct and particular risk to the health or safety of the recipient or a third person”. A local authority may identify this risk in a market safety statement in the following manner.

All casual traders/licence holders shall maintain public liability insurance to mitigate risks such as stalls blowing over; trip hazards and risks directly associated with goods sold and shall indemnify (the relevant local authority) against all third party claims.

EU Services Directive Guide for Local Authorities

(Section 16, Page 4)

. . . local authorities can only insist on traders having public liability insurance if there is “a direct and particular risk to the health or safety of the recipient or a third person” [Art. 23 (1)]. In each case where a local authority determines that a trader should have public liability insurance they should justify this requirement by detailing the risks they consider need to be insured against.

EU Services Directive 2006/123/EC

Professional liability insurance and guarantees

[Article 23(1)]

Member States may ensure that providers whose services present a direct and particular risk to the health or safety of the recipient or a third person, or to the financial security of the recipient, subscribe to professional liability insurance appropriate to the nature and extent of the risk, or provide a guarantee or similar arrangement which is equivalent or essentially comparable as regards its purpose.

Article 23(1) is written into Irish law as Article 24 of Statutory Instrument 533.

Irish Law

Statutory Instrument 533

European Union (Provision of Services) Regulations 2010

Chapter 2

PART 4 Quality of Services

Obligations of certain providers to have professional liability insurance cover

Article 24.

(1) The Minister may, after consultation with the Minister for Finance and any other Minister of the Government that he or she considers appropriate, give a direction in writing in accordance with paragraph (2) to a provider whose services present, in the Minister’s opinion, a direct and particular risk to—

(a) the health or safety of a recipient of the service concerned or any other person,

(2) A direction under paragraph (1) shall require the person the subject of the direction to

(a) obtain and maintain professional liability insurance in respect of a risk specified in the direction,

Recital 99 of the Services Directive states that a local authority cannot stipulate the level of cover that a trader must have, a local authority can only recommend a level of cover.

EU Services Directive Guidelines for Local Authorities

(Section 16, Page 4)

Local authorities may ensure that traders have professional liability insurance (i.e. public liability insurance). However there are limitations on competence in this area. Recital 99 states that local authorities can no longer stipulate the level of cover, which traders must have.

EU Services Directive 2006/123/EC

(Recital 99)

The insurance or guarantee should be appropriate to the nature and extent of the risk. Therefore it should be necessary for the provider to have cross-border cover only if that provider actually provides services in other Member States. Member States should not lay down more detailed rules concerning the insurance cover and fix for example minimum thresholds for the insured sum or limits on exclusions from the insurance cover. Providers and insurance companies should maintain the necessary flexibility to negotiate insurance policies precisely targeted to the nature and extent of the risk. Furthermore, it is not necessary for an obligation of appropriate insurance to be laid down by law. It should be sufficient if an insurance obligation is part of the ethical rules laid down by professional bodies. Finally, there should be no obligation for insurance companies to provide insurance cover.

Irish Law

Statutory Instrument 533

Article 24. (5)

Where a provider is required to obtain professional liability insurance, or to provide a guarantee or enter into some equivalent arrangement, a competent authority in the State shall accept as sufficient evidence of that insurance cover a certificate issued by a credit institution or insurer established in a Member State where the provider is already established.

Conclusion