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Public and Product Liability Insurance: Its Differences and Why It’s Important

Businesses need legal insurance protection as well. Legal disputes over injuries or damages against your company can greatly affect your day-to-day business operations. Therefore, availing public and product liability insurance is a wise choice any business can make.

Are you not sure what these policies cover and how your business can benefit from them? At the end of the article, you will know the importance and difference between Public Liability and Product Liability insurance.

Main Difference Between Public and Product Liability Insurance

Public and Product Liability insurance mainly differ on what caused the injury or damage in the first place. For instance, if the accident occurs on your business property, then you are qualified to file for a public liability protection claim.

If the product you sell, distribute, or deliver causes an accident that injures a person or damages property, then your product liability protection will cover you.

What does the insurance cover?
Public liability insurance covers the cost of the damage or injuries your accident causes to a third party. This type of cover compensates your expenses for unanticipated accidents that happen within your business premises.

On the contrary, product liability protection covers the cost of the damages or injuries your products caused to a third party. If the failure of your product harms a business or a person, your product liability coverage reimburses you for the reparation.

Who needs this liability insurance?
It is ideal for any business to avail of a public liability coverage policy. Store owners can file public liability claims when a customer is injured in their shop.

Outside or home service companies can be compensated for the cost of repairing any third-party damages that occurs during manual labour.

Moreover, product liability insurance is great for businesses that sell and manufacture goods. The coverage policy can reimburse the company for injuries and damage caused by their defective product.

Why does your business need public and product liability insurance?
Most client contracts specify the need for public liability coverage. However, businesses are not obligated by law to have product liability coverage.

Despite the lack of legal requirements, getting both protection policies can help you cover the cost of any bodily injuries and property damage in the event of mishaps.

Public and Product Liability Insurance in a Nutshell

In summary, different businesses benefit from public and product liability protection policies. Both policies help indemnify corporations from legal liabilities after an unforeseen incident.
Public liability insurance claims can be filed when a third party pursues legal action over an injury or damage that occurred on your property. Likewise, product liability claims can be filed when the failure of your product harms a third party.

The law does not require businesses to have both coverage policies, but client contracts require public liability insurance. It’s best to go over the limitation and coverage of these policies to ensure that you get your money’s worth.
General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.

All information above has been provided by the author.


Jade Lyons, JL Insurance Brokers, ABN 40 631 482 436, AFSL 403727

This article originally appeared on JL Insurance Brokers Blog and has been published here with permission.

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