As a business owner, liability insurance is designed to help cover you in the event an outside party is injured or an event results in property damage. This could be a customer slipping inside your shop, a product causing injury, or even a subcontractor damaging a client’s property. 

When it comes to public liability insurance, the question is not can you afford insurance. The real question is, can your business afford it if you need to pay out of your own pocket in the event of an accident? For many, the answer to this question is no.

What is Public Liability Insurance?

Public liability insurance is a type of business insurance that can aid you in the event that a member of the public holds your business responsible for an accident, injury or damage to property.

According to Monaco Compensation Lawyers, in Australia your average slip and fall settlement for a mild injury could cost between $10,000 - $50,000 while a severe injury could cost between $500,000 - $2 million+. The settlement amount for an injury that you are found negligent for, can include lost income and super, legal fees, and care and support for the injured party.

This brings us back to our question. Can your business afford such a cost?

To give you a better understanding of public liability coverage, let's break down what it does and doesn't cover.

What is covered under public liability: 

• Damage to third party property
• Legal costs and fees
• Financial compensation

What public liability doesn't cover: 

• Employee injury (this would fall under Workers' Compensation Insurance)
• Damage to your own property
• Faulty workmanship
• Illegal acts or deliberate damage
• Pollution and asbestos
• Motor vehicle legal claims
• Losses due to a cyber attack
• Errors in professional advice (this would fall under Professional Indemnity)

Know the inclusions and exclusions to ensure that you are covered in case of an accident. Always consult your Product Disclosure Statement or ask your insurance broker if you are unsure about your policy.

DIFFERENCE BETWEEN MANAGEMENT LIABILITY, PROFESSIONAL INDEMNITY, AND PUBLIC LIABILITY INSURANCE

While public liability insurance covers third party claims, management liability protects individuals within the company and the company itself. Professional Indemnity covers against financial losses as a result of mistakes, professional negligence or omissions.  

To break each of them down:

•       Management Liability = Internal governance and liability for managers, directors and the company itself.
•       Professional Indemnity = Covers against financial loss because of your services or advice to clients.
•       Public Liability = Focuses on injury and property damage to third parties as a result of your business or services.

The type of cover you need will largely depend on the unique risk factors and legal liability you face as a business.

Who needs Public Liability Insurance?

Public liability is beneficial for professional services and small businesses whose business operations involve interactions with suppliers, clients or the public. Whether you have a home office that hosts client meetings, a retail business with customers, or a roofing contractor visiting a client site, PL insurance can help you minimize your risks.

If you are looking for public liability insurance, submit a quote request below.

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If you’d prefer to chat with our team directly, you can contact the office and chat to a broker to answer your questions. 

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Public and Products Liability Insurance FAQs 

Do you still need public liability insurance if you are self-employed?

Yes, if you are a Small and Medium-sized Enterprise (SME), freelancer, or sole trader it can be very beneficial and, in some cases, a legal requirement to have a current public liability policy.

For certain trades who work on client sites or in construction zones, public liability and a Certificate of Currency are often mandatory obligations. Most trades opt for public liability limits of indemnity between $5 million and $10 million, with $20 million aimed towards higher-risk activities.

For businesses who face risks such as having clients visit a site or shop, or by selling products, you are facing a higher risk. This can also apply to those you need financial protection.

Does public liability cover your employees? 

No, if you are looking for cover for your employees in the result of an accident, you will need to seek workers compensation.

Public liability is targeted more towards claims that arise from third parties, such as customers visiting your shop, this would not cover your own workers.  

What Affects the Cost of Your Premium?

It’s not just about how big or small your business is that affects how much premium you pay. An insurer will evaluate based on several factors before they quote you a price. This evaluation allows them to ensure they have properly captured that risks you face

• Your industry 
• Previous Claims 
• Location 
• How many employees you have 
• Number of clients 
• Revenue 
• Nature of activities 
• Risks and management procedures 

What to do if you face a public liability claim?

If you are facing legal action, the first thing you need to do is contact your insurer or insurance broker.

At Peter Cameron Insurance Broker, our claims management team will assist you through your claim. Contact our office today if you have more questions about your insurance policies or more.

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Any advice provided on this website is general in nature. It does not take into account your objectives, financial situation or needs. You must therefore assess whether it is appropriate, in the light of your own individual circumstances, to act upon this advice.