PUBLIC and PRODUCT LIABILITY INSURANCE FOR BICYCLE FRAMEBUILDERS – Updated

I previously posted a piece on public and product liability and general insurance for framebuilders. Since then my own circumstance have changed somewhat and I thought an update would be helpful.
Originally I decided I should really have product liability insurance as I build frames for others, albeit only occasionally. When my then broker approached my existing house insurers (as I work from home) they immediately cancelled my insurance policy without giving a reason (Legal and General). I have no idea why they decided to do this as there were no exclusions in my policy and it was merely a query. This gave me the first taste of how difficult, and ?uninformed, insurers and their agents appear to be about bicycle frame building.
Essentially there are three types of Liability Insurance:
Employers Liability, which is to protect your employees and not relevant to me and probably to most small custom builders who are self employed or hobbyists.
Public Liability, which is to protect yourself against the possibility of claims of faulty workmanship and also injury or accident to persons who may be visiting your home or premises in connection with your work.
Product Liability, which is to protect you against claims against defects in the products you sell or give away!

A Summary of my experience
In Short there appear to be three routes to acquiring Insurance for Framebuilding:
1. If you are a small builder working from home and are selling your products i.e. you are running it as a business. Approach a broker or insurance company direct that deals with product liability and see if they will quote. They may give you a small business or tradesman policy and are likely to need you to insure your whole property with them.
2. If you are working from a separate workshop the above may also apply, but the method below may also be applicable.
3. If you are working from home or a separate workshop and are a hobbyist or not making any money such that you are not considered as a business, you can approach a broker or insurer direct that deals with standalone Public and Product Liability and Workshop Insurance.
Below is my own experience of dealing with various insurers which may help if you are new to the subject.

My Own Experiences
Over the last few years I have attempted to negotiate a policy from several sources with no success. Initially I was uncertain if I would be selling frames as such but eventually secured a policy through Towergate Insurance Services. They also operate as the insurance broker for The Federation of Small Businesses and the policy I initially took out was a FSB Business from home, Home Protector policy, designed for small business and tradespeople working from home. The policy and insurance company changed most years. I have been told it is not unusual for Insurance companies to drop in and out of certain areas of liability.

Initially I felt I could get away with just Product Liability Insurance but in the final analysis I had to accept a policy with both Public and Product Liability as the Insurers feel the two need to go together. Furthermore my policy was not designed to be stand alone i.e. it had to be tagged on to a buildings and contents policy or a workshop buildings and contents policy if your workshop is separate from your residence. It is also apparently illegal to double insure your property so for practical purposes I had to really go with the single insurer. I therefore had a single policy for buildings, contents and public and product liability. It also covered my tools, jig etc and stock for work in progress. The initial policy was underwritten by AXA. The only additional condition placed on the cover was that I had to keep my flammable substances (Oxygen, Propane and Gas Flux), in metal containers, which fortunately they are in anyway. Bizarrely my activity on the policy was specified as Bicycle Repairs. I was told this was because Bicycle Framebuilding does not appear as a category on Insurers computers, but was further reassured the Insurers were aware of what I was actually doing! From my experiences with several brokers who are obviously communicating second hand with the underwriters I feel there is not often a full grasp of what custom frame building is about! What also surprised me was there was no interrogation of either my qualifications or my experience of frame building. After two years the broker offered me a different policy, for a similar price, with Ageas. My new policy did not specify I had to keep all flammable substances in metal containers but insisted I had a fire extinguisher under a service contract! (see later).
Regarding cost, it wasn’t cheap. You would have to decide for yourself if it represents good value for money. I live in a standard semi-detached house with integral garage. I used to pay circa £200 for buildings and contents insurance. With the Public and Product Liability together with workshop contents added, it was now circa £700. Towergate also charged an initial £50 Broker’s fee. I feel if you compare costs with Car Insurance it probably represents reasonable value for money.
Of course I had a commercial policy, as at the time this seemed to be the only way forward, but after a few years my policy was renewed via yet another different agent. One of the problems of dealing with a large company may be that you seem to deal with a different person each year who seems not to be aware of your requirements from the year before. After studying my new 2023 policy it was clear the insurers thought I was only doing bicycle repairs and the policy I had been given was useless. Attempts to place the policy elsewhere were frustrated by the fact that I was unable to quote a turnover for the business (because I was not a business) and have never generated any income. The previously helpful Towergate were no longer able to quote.
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I was now in a position of trying to find insurance again and wondered if I would have to give up frame building or go uninsured! I therefore decided to go down a different route which may be the only one open to pure hobbyists.
That is I took out a buildings and contents policy through another regular broker who gave me an excellent deal (with Ageas again). However they were unable to give me any product liability or insurance for the relatively high value items (anything above £1500) in my garage/workshop, simply because it appears generic house insurers will not do specialist stuff like machine tools. Even if they do they will wish to quote separately and the premiums are very high. This is an issue well known to model engineers and the like who are all faced with astronomical premiums for their workshop tools or to simply not insure them, pretty much like trying to insure multiple bicycles.
I then discovered Craft Insurance. Although there are several brokers who do this I went to https://craftinsurance.co.uk. Their policies are underwritten by Hiscox, who also offer a direct service https://www.hiscox.co.uk. You can get a quote for a policy for public and product liability for practicing and demonstrating your craft, and set it up online. I contacted them initially to confirm frame building would qualify. They also offer workshop contents insurance separately, but, it is still very expensive. I was quoted £500. I did however get £5,000,000 product liability insurance for circa £100. It also includes a limited amount of cover for the USA and Canada.

Where did I have No success in obtaining a quote originally?:
Swinton Commercial, they spent several days looking only to fail to quote.
Butterworth Spengler, probably the largest cycle insurance broker who arrange Insurance for both Cycling UK and ACT (Association of Cycle Traders) did try but declared their two underwriters (one of which was Zurich) did not insure framebuilders. This seems to be nonsense as they have arranged insurance for some builders (see comment below) but it would seem like you have to have a retail business as well.
Walker Midgley, who are in fact now part of Towergate Insurance, were unable to quote despite providing many specialist policies for model engineers.
It appears you can get insurance for building a scale traction or steam engine, but not a bicycle frame.
National Farmers Union (NFU Mutual) were unable to quote.

I did receive further helpful information from Hywel Evans, a former frame builder, now inactive, who previously received a positive response from two other brokers, viz:
Insync insurance (https://insyncinsurance.co.uk), who offered a policy with Zenith, described as a small tradesman policy. He was able to get insurance for Public and Product Liability as a stand alone product,  which is of course the path I have now gone down. It excluded USA and Canada which can be added at extra cost.
Knighthood Corporate (http://www.knighthoodcorporate.com) who insure various parts of the bike industry and exhibited an interest in quoting if necessary.
DPI Insurance (https://www.dpi-insurance.co.uk) based in Bury, Greater Manchester (formerly Lancashire), have expressed an interest in the field following comments from Michael Burns below. I did contact them when I was previously looking to renew but I did not receive and enthusiastic response.

I would obviously be interested in any additional comments, especially experience of alternative insurers.

A note about fire extinguishers
My original Ageas policy insists I have a dry powder fire extinguisher of at least 3kg in my workshop and that it be subject to an annual maintenance contract. I was initially alarmed by this as a web search suggested the national organisations offering contracts would charge a high price. In the end I was lucky to find local business: Lancashire Fire Extinguishers. https://www.yell.com/biz/lancashire-fire-extinguishers-manchester-8378706/
The owner Chris, came to my house on a Saturday morning and exchanged my 6kg extinguisher (which was due for changing as they last about 5 years) gave me all the appropriate certification and a sign. He charged me only for the extinguisher, which seemed to be similar to what it would have cost me at a cheap retailer and will return in a year to retest for around £20. (Prices have of course now gone up). This was a result and gives peace of mind. Thoroughly recommended if you live in Lancashire.

Links

• Association of British Insurers Guidance on Employers Liability Insurance
  https://www.abi.org.uk/products-and-issues/choosing-the-right-insurance/business-insurance/liability-insurance/employers-liability-insurance/
• Association of British Insurers Guidance on Public liability Insurance https://www.abi.org.uk/products-and-issues/choosing-the-right-insurance/business-insurance/liability-insurance/public-liability-insurance/
• Association of British Insurers Guidance on Product Liability Insurance
  https://www.abi.org.uk/products-and-issues/choosing-the-right-insurance/business-insurance/liability-insurance/product-liability-insurance/