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Often we will be asked what the difference is between two public liability policies.
This questions is especially common when two or more policies have a big difference in pricing.
So what’s the story? Is one policy better than the other to justify the different quotes?
Do public liability policies differ?
Broadly speaking there is no difference in the basic cover offered by public liability insurance policies.
All policies cover the costs involved in a claim against you for property damage or personal injury to another person that you are found to be liable for.
Where the policies can differ is in the exclusions and endorsements.
Some people might refer to these items as ‘the fine print’. They dictate some of the finer details when it comes to what a policy does or does not cover.
These exclusions and endorsements cover a wide range of areas, and whether or not they are important to you will depend on the type of work you do.
For example some policies will only cover external work up to 10m or 15m. If you’re a bookkeeper this isn’t an issue, but if you’re a painter there is a big difference.
Another common endorsement relates to hot works. Not an issue for a cafe, but very important to understand and adhere to if you’re a welder.
Does the price match the level of cover?
An often used saying in life is “you get what you pay for”. It would be easy if we could apply the same thinking to insurance, but it’s not always right.
Whilst the cost of a public liability policy is sometimes related to the quality or comprehensiveness of the cover, it shouldn’t be seen as the sole indicator of which is the better policy.
If your business type is unaffected by the common exclusions and endorsements relating to public liability, then there’s little point paying more for a policy with fewer exclusions.
On the other hand if your business is impacted by the exclusions, then the more expensive cover with fewer relevant exclusions is most certainly going to be better for you.
The key here is to use an insurance broker who knows your business type and knows which policy options, exclusions and endorsements are going to be important to you.
They will be able to tell you if the $600 policy is adequate for your needs, or if you need to go with the $6,000 policy to ensure your business activities are fully covered.
One more factor
There is one more factor to consider, which has nothing to do with the policy wording, but can sometimes be related to the pricing.
This is the claims experience you will have with the insurance company if and when you need to make a claim.
Of course you hope to never need to make a claim on your public liability, but if you do, you need to know that the insurer is going to look after you.
The company offering the cheapest premium might not necessarily be offering a great level of service when it comes to claims.
But that’s not to say the most expensive insurer will be offering the highest level of service either, and this is another area where a good public liability broker can help.
The broker might tell you that although one policy is $50 more than the other, their experience with both insurers tells them that one provides a much better claims experience than the other.
Summing up
Broadly speaking there is no difference in the basic cover offered by each public liability policy.
Where they can differ is in the exclusions and endorsements, or ‘the fine print’. For some business types these won’t be as important, whilst for others they will be critically important.
You could read each product disclosure statement from cover to cover to work these out yourself, but a much earlier option is to use an insurance broker.
And finally, a more expensive premium does not always equal a higher quality insurance policy. This is where a broker can help you to get the right cover without spending more than necessary.