What is Public Liability Insurance?
What would you do if, through the course of conducting your business, you caused injury to another person or damage to someone else’s property? You’d feel pretty horrible, I know, but what happened if they wanted you to pay medical costs, or to fix the damage?
Public Liability is cover that pays for compensatory costs and legal defence if you or your business has caused personal injury or property damage to another party as a result of negligence in the course of your day-to-day business activities.
The bare fact is the majority of businesses need some form of liability insurance. Let’s face it, there wouldn’t be many of us out there in a position to defend a claim or pay compensation if you were sued for damages - legal costs alone can be significant even on small claims.
What are some examples of negligence in my business?
If you’re a cleaner and you don’t put out appropriate signage when you’re mopping and someone slips, you would be considered negligent.
If you back into your client’s fence when you’re maneuvering your truck down their driveway, you would be considered negligent.
If you haven’t fixed that loose tile on the front doorstep of your commercial property and a customer of your tenant trips, you would be considered negligent.
Is Public Liability compulsory for businesses?
While in most cases it is optional for a business to have Public Liability insurance, in some industries it is compulsory. Regulatory bodies insist a business holds a Public Liability policy and often will nominate a minimum sum insured that must be taken. For example, the licencing bodies for the trades and construction industries require contractors to show evidence of their Public Liability before they can take out or renew their licence each year. Without this evidence (called a Certificate of Currency), they will be unable to gain their licence.
So while in some cases it is optional, it is strongly recommended and encouraged that every business takes Public Liability insurance.
What is Products Liability and do I need it?
Products Liability covers your products or services for any injury or property damage they may cause another party. If you manufacture, sell or distribute products, you can be held liable and in most cases, the other party doesn’t have to show proof of negligence or intent to cause harm.
Did you know, if you import products, you are deemed the manufacturer under Australian Consumer Law? That means you’re assuming the responsibility for the safety of that product even though you had nothing to do with the manufacture of them.
Why is a broker so important when it comes to Public Liability insurance?
Just as no two businesses are the same, your liability exposure (public and products) can vary even within industries. There are many different factors that go into sourcing the most appropriate Liability insurance.
The good news is most occupations can fit under a Business Pack Insurance along with your other insurable assets and exposures. But in some cases, you may need a more tailored and specific Liability cover.
In both instances, having a broker know the ins and outs of your business, where you’re at now and where you’re going, means getting the right Public Liability fit for your specific needs.
This article originally appeared on MeyerInsure - Blog and has been published here with permission.
Advisr does not provide advice and does not hold a financial service license (AFSL). All information above has been provided by Laura Meyer.