Understanding Public Liability Insurance
When you’re working at your premises, or visiting clients/working on projects off-site. As a business owner, you do everything within your power to make sure that:
No one is injured, or
Property doesn't become damaged.
However, sometimes the unthinkable happens and you damage a third party property or worse someone becomes injured, as a result your business becomes legally responsible.
Without the right type of insurance, your company can take a significant financial hit. That’s where Public Liability Insurance comes into place, as it protects you and your business against the substantial legal costs to engage lawyers to help you defend and pay any damages you are liable for.
What does Public Liability Insurance cover?
Payment of damage to the property of a third party or loss of proven business income. A third party is any customer, visitor or anyone you deal with for business, except employees;
Legal costs associated with having a lawyer assist you and defending the claim, if necessary;
Costs to employ specialists and consultants to help in your defence of the allegations;
Damages agreed as payable by your insurer to the third party, if they have found you responsible;
Damages ordered by the court; also
Payment of the third party’s legal costs and expenses, if your found responsible for the Injury, death or property damage.
What does it not cover?
It’s important to understand that Public Liability Insurance isn’t the only insurance required by your business. For example, it doesn’t cover your business for injuries to your employees, which is covered by Worker’s Compensation Insurance. Insurers are also usually not allowed to pay any penalties or punitive damages on your behalf.
In addition, if your products are recalled for whatever reason, Public Liability Insurance doesn’t cover you for the financial or reputational losses due to this event. This would be insured by Product Recall Insurance. Lastly, issues involving asbestos, aircraft or motor vehicles are not covered under this policy, as there are specific insurance policies for these items too.
Do you really need Public Liability Insurance?
Whilst slips, trips and falls are only one type of allegation that can be claimed against your business, it’s good to know the numbers have been on the decrease since 2016. However, that’s no reason to become complacent because the financial and reputational costs to fight these allegations in a court of law can be significant, and the average cost of each claim has been increasing.
This means that you can take all the care in the world and rarely ever be faced with these types of allegations, but it can only take one claim to ruin your company financially and reputationally. So if your company interacts with suppliers, customers or the public in any way, then you can benefit from some level of Public Liability Insurance.
To decide what type of insurance policies are suitable for your business, talk to Risk Guidance Insurance today.
General Advice Warning
The information provided is to be regarded as general advice. We recommend that you consider the suitability of this general advice, in respect of your objectives, financial situation and needs before acting on it. You should obtain and consider the relevant product disclosure statement before making any decision to purchase this financial product.