As a business owner, it is easy to be overwhelmed by all of the types and terminology associated with insurance cover. Liability insurance is especially important to all sizes of businesses.
It is critical to the safety and success of your company to understand the kind of liability cover you need. A Public Liability policy should be the most important contract/document in almost any business.
Important Liability Insurance Types
There are several kinds of liability cover available. You should understand the specifics of each type to ensure you have what you need in place to protect everything you worked so hard to build.
- Product Liability – If your company makes, sells, distributes, or imports products in Australia, you should have product liability cover. With this cover, you have protection in the event that a product or service with connection to your company inadvertently injures or kills someone. It also protects you if a product or service you provide damages a business. It is important to know that persons believing your product or one you import or distribute harmed them can take legal action against you. In some cases, the wronged party does not need to prove your negligence.
- Professional (Liability) Indemnity – Professionals who provide services or advice as a part of your business should invest in professional indemnity insurance. It protects you against legal costs and claims for damages to third parties which may arise out of your negligent act, omission or breach of professional duty in the course of your business.
- Public Liability – Of the varieties of liability cover available, public liability is by far the most common. This is because Public Liability Insurance protects your business against claims of personal injury or property damage that a third party suffers (or claims to have suffered) as a result of your business activities. It covers incidents that may occur in your workplace, or incidents at other locations.
Is Public Liability Insurance Mandatory?
Public liability insurance is not mandatory. If you were to ask any business owner who needed to make compensation to a wronged party, they would tell you how much they would have saved by having public liability cover. Suits like these are exceptionally costly not only financially but in terms of stress, bad publicity, and a sullied reputation.
You should be aware that even though public liability insurance is an optional form of insurance, there are circumstances where a business owner must have public liability cover.
Will My Other Cover Eliminate My Need for Public Liability Insurance?
It is common for individuals and businesspersons to mistakenly believe that an individual business policy will take care of all necessary facets of insurance.
However, many policies contain different specifics in wording that can be difficult to understand. It is possible your policy contains a specified amount of public liability cover, yet this is not always the case. Additionally, unfortunate policyholders may find that although there is public liability cover rolled into their business policy; the limits may be insufficient.
An insurance broker can assist you with the right advice and protection for your business.
The best way to help yourself is to ask plenty of questions and do not be shy about asking a question more than once if you do not understand the initial answer. Additionally, if the insurance agent or broker seems uninterested or annoyed by your questions, you may want to think about finding a different person to service your insurance needs.
What Does a Public Liability Policy Usually Cover?
There are numerous events your public liability policy will cover. These include but are not limited to:
- Personal injuries
- Property damages to structures and contents of a physical property
- Damages caused by advertising
- Costs of investigating claims
- Legal costs involved in the case
- The cost of settling claims out of court
Are There Specific Things Usually Not Covered by Public Liability Insurance?
Aside from damages that exceed the specified amount of your policy’s cover, there are a few events that can be excluded in a public liability insurance policy. Best to speak with your General Insurance Broker and get the right advice on inclusions and exclusions.
- Claims brought by your employees
- Asbestos-related claims
- Claims regarding damages incurred during the use of a motor vehicle
- Damages caused by participating in criminal activities
- Claims to repair subpar workmanship
- Claims relating to participating in known hazardous activities
No matter what business you own, you have worked far too hard to watch it topple because you lacked the proper insurance or advice. The right liability insurance is something every business needs.