All About Public Liability Insurance

What is Public Liability Insurance?

Whether you’re an individual, small sole trader, SME, or large corporation, Public Liability Insurance should be on your Insurance shopping list. It’s designed to cover payments to third parties for compensation where you are found to be negligent following personal injury or property damage. It will also cover the legal costs incurred in addition to any judgement awarded against your business. It’s also important to note that even if you are not legally liable your Insurer will still defend you and pay those legal costs up to the Sum Insured under your policy. Whichever way you look at it, it’s a good idea.

What does Public Liability Insurance cover?

As mentioned above, Public Liability Insurance covers bodily injury and/or property damage caused to a third party in connection with your business activities. A liability claim for property damage can be as simple as unloading a ladder from a vehicle and striking a motor vehicle parked next to you. If you are a civil contractor it could be as simple as striking an underground pipe or cable. These types of claims have the potential to cause significant interruption to surrounding businesses.

Why do I need Public Liability Insurance?

Holding a public liability policy is not a legal requirement, unless you have entered into a contractual requirement with a third party. In most cases the decision to hold a public liability insurance policy rests with the individual or business concerned. When you look at the potential for loss to be incurred, these days it’d be a brave business that doesn’t hold a policy with at the very least a $5,000,000 limit. Additionally, many contractual requirements commonly ask for a minimum of $10,000,000 or $20,000,000 limits. The cost increases from $5mill to $10mill and $20mill are generally in the range of 15%- 25% . Even when businesses operate to the best of their ability there is always the potential for a loss to occur. It is a these times that holding a Public Liability Insurance policy will protect you.

Does my Public Liability Insurance cover Contractors / Subcontractors?

Unless agreed to be an Insurer, Public Liability Insurance policies do not extend to include cover for contracted workers. Each contractor that is engaged by your company should hold their own Public Liability Insurance policy and evidence of this should be sought by way of a certificate of currency. You will always be protected against the actions of any contractor for the vicarious liability that you hold. Your Public Liability Insurance policy should also extend to include claims for injury or damage to any contracted workers. Generally these are Workers Compensation recovery claims by the contractors own Insurer and they can be costly. In most cases Insurers will impose a higher claims excess or deductible.
Does Public Liability Insurance cover injury to my employees
No, Public Liability Insurance specifically excludes injury to any person who is deemed to be an employee of your business. In Australia, it is a statutory requirement for all companies to hold the relevant Workcover policy in their state. Each state varies as to how the scheme operate but all business who employ staff should hold the relevant coverage.

Is Public Liability Insurance Expensive?

It’s often said that unwise people know the cost of everything and the value of nothing. We lose track of how many businesses say that they wish they had public liability insurance, but it’s always after disaster has struck. By then it’s a little too late. Thankfully, finding the right public liability insurance for you or your business is easier than ever.
There are many factors that are taken into account when determining a premium for Public Liability Insurance. These are –
The type of business activities undertaken (ie is your occupation a high hazard business such as ‘Asbestos Removal’? Or is it a low hazard business such as a ‘Business Consultant’?)
Gross Revenue of your business (ie the greater the turnover, the more business that is being conducted and the likelihood of a claim occuring)
Limit of Indemnity required (ie $10,000,000 – $20,000,000 or $50,000,000)
Have you incurred any prior Public Liability Insurance claims in the past?

These days, obtaining Public Liability Insurance can be done quickly and easily and insurance premiums are extremely competitive. If you do not currently hold Public Liability Insurance for your business, now is the perfect time to reconsider, as the potential for loss is far greater than the relatively small cost involved.

You run your business – trust us to protect it. Get in touch with us today to find out how we can help.