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Public liability insurance is an important way of protecting a business against a range of risks.
One of the biggest risks facing small to medium sized businesses is that of causing property damage or personal injury to other people.
If your business activities result in such an event you will generally be liable for their financial costs. It is here where public liability insurance can help.
What Does Public Liability Cover?
There are a range of risks covered by public liability insurance, but the main focus is on property damage and personal injury.
If you cause property damage or personal injury to another person through negligence or faulty workmanship, that person has every right to take action against you via the courts.
If the court finds that you are responsible, you could be ordered to pay compensation which can stretch into the hundreds of thousands, or even millions of dollars in some cases.
With public liability insurance, the insurer will get involved early in the process to determine exactly what you may or may not be responsible for.
If they deem that you are responsible they will generally seek to make a financial settlement with the person before the case has to go to mediation or court.
If the case does make it to court, the insurance company will be there by your side and will ultimately be responsible for any financial costs awarded by the court, provided of course that the incident is covered by your policy and is within your sum insured.
What Doesn’t It Cover?
All public liability insurance policies will have a range of exclusions. Some of these are common to all policies, whilst others are unique to specific policies.
Generally speaking, a public liability insurance policy will not cover the following events:
- Any unlawful activity
- Any deliberate act to cause damage or injury
- Personal injury to you or your employees
- Property damage suffered by you or your employees
There are also exclusions on some policies which are relevant to certain occupations and business types. These can include working on marine vessels over a certain size, working on high-risk locations such as airports and mines or working on construction projects over a certain size.
Most of the mainstream public liability providers will not cover these situations, however there are many specialist insurance providers (commonly known as underwriting agencies) who will provide cover through specially designed policies.
If you have any doubts about what your policy does or doesn’t cover, especially if you do work which is outside of the ordinary, then you should speak with your insurance broker or adviser.
Who Needs Public Liability Insurance?
Almost any business type can benefit from public liability insurance. If there is a risk that your business activities could cause property damage or personal injury to others, then you should have cover in place.
There are some business types which are required by law to have public liability insurance.
A number of different trade occupations and business must have cover in order to obtain their contractor’s licence. Examples of this are Victorian plumbers and Tasmanian and Queensland electricians.
Many tradesmen are also required to hold public liability in order to enter the worksites of some building and construction companies. This is often the case for self-employed and subcontracting tradesmen.
If you are working for a business on wages you will generally be covered by your employer’s insurance, but if you operate under an ABN and invoice the company hiring you, then you will most likely need your own cover.
How Much Does Public Liability Cost?
Public liability is generally not an expensive form of insurance, however the cost can be influenced by a number of different factors.
The public liability insurance cost for your business will be influenced by two main factors, which includes the type of business activities you undertake and the size of your business measured by revenue or staff numbers.
Other factors affecting the cost of your insurance can include the areas which you work in, especially if they are considered high-risk such as airports or chemical factories. Whether or not you engage subcontractors can also have an impact in some cases.
The easiest way to find out how much cover will cost for your business is to obtain a quote. Here at publicliabilityinsurance.com.au we can arrange quotes through our network of insurance brokers and advisers.
To obtain a quote on your cover simply complete our online public liability quote request form. If you would like more information about what public liability insurance is please contact us or speak with your insurance broker.