Navigating Public Liability insurance claims

What does Public Liability insurance cover?

Public Liability insurance is designed to provide protection for you and your business in the event a customer, supplier or a member of the public brings a claim against you due to their being injured or sustaining property damage as a result of your negligent business activities.

Do small business owners need Public Liability insurance?

Public Liability isn’t a legal requirement under Australian law, but it may be required in certain states for some occupations to be correctly licensed to operate. It may also be a requirement to join some industry associations, or to work on certain contracts or jobsites.

Common Public Liability claims small business owners face?

Water damage occurs more often than people may expect. Water can spread quickly and may ruin cabinetry, flooring or electrical components. Some of these situations can become costly because the damage keeps growing until the water source is isolated. Claims involving water damage may also lead to extra work such as mould remediation or structural repairs.

There are many different scenarios where third-party injury or property damage can occur. Here are some of the common types: 

Injury to a third party caused by your services

Just like a Beautician who performed facial waxing service on a client, who later noticed redness and burns on their skin which required a medical treatment plan to avoid further damage and scarring. The Beautician file a Public Liability claim with their insurer who paid out $7786 to cover the cost of the damages. 

Injury to a third party due to an accident on your work site

This is what happened to a Steel Fabricator, who when spotting during machinery operation failed to notice a third-party walking on a footpath nearby. The machinery collided with the third-party causing injury to their ankle. The Steel Fabricator made a Public Liability claim with their insurer who paid over $1.3million for legal defence and compensation costs.  

Property damage caused while working on a third-party site

An electrician experienced this when they were repairing a power point in their client’s kitchen, but accidentally caused damage to the nearby splashback while conducting the electrical work. The Electrician filed a Public Liability claim with their insurer and $1425 was paid out to cover the costs of repairing the damage.

Property damage caused by oversights or mistakes in completed work

This was the situation for a Plumber who installed a new dryer in their client’s home. The Plumber forgot to remove some safety screws from the appliance, and when the client began to operate it, the dryer toppled over and caused damage to the dryer and nearby washing machine. The Plumber filed a Public Liability claim, and their insurer paid almost $8000 to cover the cost of replacing the damaged appliances.