Liability claims can arise in many ways, from someone being injured at your premises to a customer alleging that your advice caused them financial loss.
For a small business, the important thing is understanding which risks apply to you and whether your insurance reflects how you actually operate.
Here are five areas worth checking.
1. Assuming Public Liability covers everything
Public Liability insurance can cover certain claims for third-party personal injury or property damage arising from your business activities.
But it doesn’t cover every type of liability. Professional advice, cyber incidents, employee injuries and some contractual liabilities may require different insurance.
Check the exclusions and limits rather than relying on the policy name alone.
2. Overlooking Professional Indemnity
If you provide professional advice or services, Professional Indemnity insurance may be relevant.
It can cover certain claims alleging that an error, omission or breach in your professional services caused a client financial loss. Some professions are also required to hold PI insurance.
3. Ignoring contractual liabilities
Contracts can require you to indemnify another party or maintain particular insurance limits.
Those obligations don’t automatically mean your existing policy will respond.
Before signing a significant contract, check the insurance and indemnity clauses with your adviser and obtain legal advice where appropriate.
4. Treating cyber risk as purely an IT issue
Cyber incidents can create financial and legal exposures as well as technical problems.
Cyber Insurance can cover certain costs associated with data breaches, cyber extortion, system recovery and business interruption, depending on the policy.
Insurance should sit alongside practical controls such as multi-factor authentication, software updates and regular backups.
5. Assuming contractors are outside Workers’ Compensation
Workers’ Compensation is generally compulsory if you employ workers, but some contractors can also be treated as workers depending on the arrangement and jurisdiction.
Don’t rely solely on whether someone has an ABN or sends you an invoice.
Liability risks change as your business grows, takes on new contracts or adds new services. Speak with your Insurance Advisernet adviser about the risks your business faces and whether your current policies still reflect them.
Contact Lewis Insurance Services on 07 3217 9015 or send us an email by clicking here.
General advice warning: The information provided is general advice only. You should consider whether it is appropriate for 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 a financial product.
This article was published by our AFSL Licensee, Insurance Advisernet Australia P/L, www.insuranceadviser.net