As a business owner, you likely explored a wide variety of scenarios before you decided to open your company. While you believe you thought of everything and operate in good faith as safely as possible, there is a danger that can impact virtually every business. What is this potential disaster? It is an unexpected mishap. Should an accidental occurrence cause harm to someone or their property whilst on your premises, you can be held liable.
The best way to keep you and your business safe is to carry Public Liability Insurance.
Definition of Public Liability Insurance
Public Liability Insurance is a cover for professionals who deal with customers, sales representatives, delivery people, or any non-employee on their property. The insurance protects business owners if an individual files suit claiming a loss or an injury that occurred on your property or as a result of your business operations.
Is Public Liability Insurance Actually Important?
Often, small and medium-sized business owners think that those in the world of insurance overstate the essential nature of Public Liability Insurance. However, various industry experts as well as the Australian government state that because of the likelihood of a lawsuit, all businesses should consider a Public Liability Insurance policy.
What Will a Public Liability Insurance Policy Cover?
Your Public Liability Insurance policy should generally cover the following. However, for the most accurate explanation of your coverage, you should speak with your insurance professional.
- The cost of necessary medical care for those who experience injuries on your property or as a result of actions taken by persons who are representing you and your company.
- Reimbursement for medical costs you incurred assisting the injured party at their immediate point of need.
- The cost to repair or replace damaged or lost physical property.
- Costs associated with damages caused by persons acting on your behalf, representing your company.
- Costs incurred investigating and defending your case.
- Settlement fees
- Court awarded damages
What Are Some Events Usually Excluded From a Public Liability Insurance Policy?
As with most insurance cover, your Public Liability cover will have limits and exclusions. Speak with your insurance expert to learn the detailed exclusions that pertain to your policy. Typically, the following are not under the umbrella of a Public Liability Insurance policy:
- Claims that are associated with asbestos
- Claims on damage to products
- Claims made by employees
- Costs incurred repairing substandard quality work
- Damages from using a registered vehicle
- Court-awarded punitive damages
- Defamation allegations
Are There Any Businesses That Do Not Need Public Liability Cover?
Generally, if you have any people (who are not your employees) at your place of business, you should consider Public Liability cover. There are very few types of companies that may not need a Public Liability Insurance policy. However, if the following describes you and your business, you may be one of the exceptions.
- If your business is entirely online (designing, copywriting, tutoring) and you have no contact with the public as a part of your work
- Your residence is where you work, and no suppliers, salespeople, or customers ever interact with you in person
Even if you believe that you may not need a Public Liability policy, you would be wise to consult with an insurance professional to ensure your company is safe.
Is Public Liability Insurance Compulsory in Australia?
Even though the Australian government does not formally mandate Public Liability Insurance, various sectors require businesses to have Public Liability cover before granting licenses.
Are Public Liability Insurance and Product Liability Insurance the Same Thing?
Some Public Liability Insurance policies can indeed expand to include Product Liability cover. However, the two kinds of insurance are not the same.
A Public Liability Insurance policy will cover you and your business from liability that stems directly from your business activities or your company’s physical property.
Product Liability Insurance covers your business if the goods you manufacture for use or consumption cause a third-party loss or damage.
For example, if a client visiting your construction firm sustains injuries after an employee accidentally drops a heavy parcel on their foot, Public Liability Insurance will cover the costs associated with the mishap.
However, if a patio roof that your construction firm built leaks profusely after a mild rain, a Product Liability policy will cover the sustained losses.
I Rarely Have People From Outside My Company on the Premises, Do I Still Need Public Liability Insurance?
Because you cannot be in total control of who enters your property, getting a Public Liability Policy is an excellent idea. The notion that you and your company could suffer significant financial losses due to someone else’s poor decisions is unfair and infuriating. It is also an unpleasant fact of business. The following case study illustrates this point.
Nick recently opened a small construction company on a property that is adjacent to a daycare centre. Frequently, children from the daycare sneak into Nick’s storage area to explore. The uninvited visits occur even though Nick returns the children to the daycare and repeatedly asks the workers to keep them away because of the inherent hazards.
One day, several children slip in the backdoor, and a child climbs on a worktable. The child loses her balance, falls from the table, and breaks her arm.
Even though Nick made several requests for the children to stay away from his shop, he can still be held liable for the injuries to the child who broke an arm. However, Nick purchased a Public Liability Insurance policy. Because he has a cover, Nick will not need to suffer financially because of disobedient children or incompetent caregivers.
What Businesses Should Consider Public Liability Insurance?
While most businesses would benefit from a Public Liability policy, several kinds of companies have a greater need for this type of cover.
- If your company has a showroom, office, storefront, or other premises members of the public can gather
- Tradespeople, consultants, contractors, or others who visit people in their dwelling
- Any business that interacts with the public
Three Ways to Protect Your Company From Claims Related to Public Liability
While you may have a top-notch Public Liability Insurance, avoiding time-consuming litigation is always in your best interest.
- Prevent simple mishaps such as slips and falling objects by doing routine safety checks. Even though it may sound simplistic, a few minutes of basic vigilance can save you months of headaches if a third party sustains easily preventable injuries. Safe Work Australia offers extensive information regarding accident prevention.
- Maintain accurate maintenance and cleaning logs to back up your case that you consistently do all you can to avoid accidents
- Connect with individuals who could bring a suit against you. Often a show of goodwill can smooth feathers ruffled by a small mishap. Demonstrate your concern (without admitting fault) offer to pay for medical expenses and head-off potential escalation of the situation.
While it may be tempting to try and trim costs by excluding Public Liability Insurance, consider the impact a single mishap could have on you and your business. For information about specific coverage and rates, contact Connect Business Insurance and speak with one of their skilled professionals. Your business and your peace of mind are worth protecting.
*Please Note* The material presented in this blog post is not legally binding insurance advice. It is for informational purposes only and should not take the place of a consultation with an insurance professional.