If you’re a sole trader or small business owner, there’s no doubt you’re aware of the importance of protecting your business and your customers with Public Liability insurance. It offers protection should a customer, supplier, or even member of the public, sue your business for personal injury, death, or damage to their property. And whilst you probably take every care not to injure someone or damage their property, it doesn’t mean you won’t be found negligent should an unwanted accident occur, or someone attempts to make a claim against you. As cliché as it sounds, accidents happen. If you don’t have Public Liability insurance you face the risk of being out of pocket for hefty legal and compensation costs that can potentially cripple your business.
However, not all Public Liability policies on offer are the same, and there are plenty of factors to consider besides the cost when choosing a policy for your business. Here are five key considerations to make finding and comparing a Public Liability policy a little easier:
1. Ensure the policy covers all of your business activities
Most Public Liability policies are tailored to suit different types of businesses; however it’s still important to check that the policy adequately supports your business activities. For example, there may be policy exclusions that result in you not being fully covered for all of the risks or activities that your business undertakes.
Just as there are many insurers there are also many variations between insurers, so it’s imperative to read the fine print and check the policy wordings, endorsements and exclusions in detail.
Ask the following questions:
Will the policy cover all of my business related activities? For instance, does it cover both Public and Product Liability?
What are the inclusions and exclusions of your Public Liability policy?
And finally, who is covered by the policy?
2. Check the cover level is adequate for your business
Choosing the right level of cover depends on the nature of your business, and some businesses carry a much higher risk than others. For example, a restaurant with customers dining on the premises (ah, did somebody say ‘food poisoning’?), presents an endless list of the ways in which an incident could occur, compared to say, a mortgage broker who conducts most of their business online or over the phone and occasionally visits clients at their premises.
Therefore, it’s important to carefully consider the potential risks your business presents, and as tempting as it is to purchase a lower level of cover to save on costs it may not provide you with sufficient coverage. Your insurance is an essential part of your business that could mean the difference between going out of business and saving it in the long run should someone make a claim against you.
3. Check the requirements of your state/territory, industry association, professional memberships, and contractual agreements
Be aware of local laws regarding requirements for holding Public Liability insurance. Each state and territory has their own regulations regarding the licensing of some businesses. For instance, in Queensland it is mandatory for all electricians, and in Victoria the government requires all plumbers to hold a minimum of $5 million PL insurance in order to secure a plumbing license.
There are also many industry associations and professional memberships that require a minimum level of cover.
A lot of contracts also have requirements for Public Liability insurance. For example, most building and work sites require trades people to present a copy of their insurance certificate before they can work onsite, while many gyms and fitness studios require trainers to have their own coverage as part of their contract or agreement. Likewise, if you are renting your business premises it’s likely that your landlord requires you to hold your own Public Liability policy.
4. Get multiple quotes
Of course all business owners look for ways in which to save money, however the cheapest Public Liability cover isn’t always the best option. Take the time to assess your risks and consider the appropriate policy because at the end of the day, a cheaper policy may not give you all of the features you need leaving you high and dry when it comes time to make a claim.
The most effective way to get the best coverage at an affordable price is to get multiple quotes where you can compare the premiums and the policy features. There are many options for small business owners when it comes to shopping and choosing insurance policies. Gone are the days of having to ring around and wait for days for the brokers to get back to you. A comparison site like BizCover will let you compare quotes from multiple insurers online or over the phone saving you time and money.
5. Reduce your business risk
Even the most vigilant businesses that operate to the best of their ability still have the potential for loss to occur. However, by assessing your business and reducing your risk through sound business practices you could potentially reduce your insurance premium over time. Do all you can to improve your business by improving the general safety of your premises, such as installing sprinkler systems, burglar alarms, and deadlocks; ensuring your employees are trained correctly; and learn more about your industry to assist in reducing the risk of making mistakes and the potential for accidents to occur.
There is a lot to consider when purchasing a Public Liability policy, and the above tips are a good starting point to getting the right policy. However, as the old saying goes, you get out of it what you put in, so investing the time to carefully consider the unique risks to your business as well as researching the policies available to you will ensure you get the best policy to secure your business.