Why is public and product liability insurance important for businesses?
Public and Product Liability Insurance covers your business from claims made by any third party for compensation of an injury or damage to their property as a result of your business activities. So to ensure your business is adequately covered
to cover the costs of a claim where you are found negligent or to defend such claim, you should consider the following examples;
- A customer trips or falls in your showroom or retail store
- One of your employees reverses into a customer’s fence
- A customer’s car is damaged during a regular service at your auto shop
- A customer becomes ill after eating at your cafe
- An angle grinder manufactured by your company injures a customer in their home
- An electrician falls through a customer’s ceiling
- A crane falls onto a truck and injuries the driver
- A customer trips over a step as they leave your home based office
In essence, a public liability claim can be made against a business if a customer or member of the public is injured in an unsafe environment, their property was damaged or a defective product leads to injury or damage. The list of potential claims against a company that interacts with the public is endless and can lead to significant financial and reputational losses.
Who needs Public Liability Insurance?
Consultants who work from home, contractors and trades people, businesses that have physical premises, and any company that interacts with customers or members of the public needs Public Liability Insurance. Whether you are self-employed or have 1000 employees, Public Liability Insurance covers you against injury, death or damage to property or possessions due to negligence caused by your business.
Whilst Public Liability Insurance is not compulsory in Australia, obtaining a licence as a builder, plumber or electrician, for example, is often conditional on having this type of insurance. Also if you need to work at a construction site or other place of business, Public Liability Insurance can be a requirement before you are allowed to enter the workplace.
What does Public Liability Insurance cover?
Whilst each policy will differ between providers, generally this type of policy will cover your legal costs for defending or settling a claim, any settlement or compensation made by your business to the claimant, and any costs awarded to the claimant by the courts.
What does it not cover?
Public Liability Insurance does not cover injuries or loss to your employees, this needs to be covered under Worker’s Compensation. So if one of your employees falls through a ceiling in a customers home, any injuries they receive will be covered under Worker’s Compensation, not your Public Liability Insurance, but the damage to the customer’s home will be covered under your Public Liability Insurance. Punitive damages are also not covered, as well as criminal activities.
It’s important to note that your Public Liability Insurance can be tailored to suit your specific needs, so it pays to talk to an insurance expert. To decide whether Public Liability Insurance is suitable for your business, contact Lewis Insurance Services on 07 3217 9015 or send us an email by clicking here.
This article was published by our AFSL Licensee, Insurance Advisernet Australia P/L (21/10/2019), www.insuranceadviser.net
This information and any accompanying material does not consider your personal circumstances as it is of a general nature only. You should not act on the information provided without first obtaining professional financial advice specific to your circumstances and considering the Product Disclosure Statement.