Public Liability Insurance Explained
Public Liability insurance protects you and your business against the financial risk of being found liable to a third party for death or injury, loss or damage to property. Small business owners have a responsibility to the safety of their customers, employees, suppliers and the community; as well as third party property. If you are found to be negligent the financial repercussions can be devastating, just the cost of defending yourself could put you out of business. With the right Public Liability cover, the insurance company will provide the funds to cover your legal costs and any compensation claims, leaving your business free of financial risk. Phew!
Most public liability policies also extend to product liability. If you sell, supply or deliver goods, even in the form of repair or service, you may need cover for claims against you where goods have caused injury, death or damage. Product Liability insurance covers you if any of these events happen to another business or person by the failure of your product or the product you are selling.
Even the most careful businesses run the risk of injuring someone or damaging something during the course of operations. And you don’t want to be left with empty pockets (and some) because you tried to save a bit of cash and not buy the right Public Liability insurance.
If the risk to your businesses is such that you would go out of businesses should you experience a public liability claim, then you need the insurance. It’s as simple as that.
And if you are doing business with another business, make sure they have public liability insurance too so all’s well that ends well should an accident or injury occur from their negligence.
A public liability claim could result from:
- An unsafe environment where a third party was injured
- Damage to a third party’s personal property
- Injury caused by you or one of your employees from your negligence
- A faulty or defective product
Do I really need Public Liability Insurance?
The short answer. Yes. The long answer. Absolutely yes. If you or your employees interact with other people while doing business in any way or form then you need it. For example:
- Consultants/Contractors/ Tradespeople who work from home or visit their clients’ premises
- Businesses that have an office, showroom, shop or any premises
- ALL businesses that have interaction with customers or the public should have Public Liability insurance
Could this happen to your business?
Accidents can happen anywhere, anytime. Like the happy pub goer falling through an open cellar door which resulted in lots of ‘whining’! Whatever line of business you are in, you need to make sure you are covered for all types of unforeseen events.
Don’t believe us? Here are a couple of real-life claims examples…
Graphic Design Business – NSW
A client visiting a graphic design business fell down a dip whilst walking through a doorway at the business premises, sustaining a hair-line fracture and ligament damage to her left foot.
The customer commenced legal proceedings against the graphic design business to recover the cost of medical treatment following her injury, as well as the loss of income whilst she was unable to work her normal job as a shift worker in a warehouse.
The seriousness of the customer’s injuries and claims she was unable to perform any work were suspicious, so the insurer appointed assessors to conduct an investigation and provide expert opinion reports on the validity of the customers claim. In addition, the insurer appointed a law firm to act on the graphic designer’s behalf to obtain copies of receipts for medical treatment and statements from the customer’s employer confirming the timeframe she was unable to work and would not be paid for.
The entire process took three months to finalise, and total costs incurred for the assessors and lawyers were $30,000. Compensation for the medical treatment and loss of income totalled $45,000.