Public liability insurance is one of the most common requirements for a business. A policy provides protection against claims for personal injury and property damage. A claim can be made against your business by customers, suppliers, employees and members of the public.
In the event of a claim public liability insurance will pay out for legal or defence costs as well as injury or damage caused. Injuries claimed may not just be physical in nature. A claim can also include emotional and psychological injuries. With all costs included, public liability claims can often come in over the six figures.
Examples of Public Liability Claims
There is a wide range of situations that are covered by public liability insurance. Here are just a few examples of why businesses need to protect themselves.
- A customer trips on an uneven step or spilt liquid at a commercial premises, the injured customer makes a claim for medical costs associated with the injury they sustained and also loss of their earnings as the customer could not work whilst injured.
- A carpet cleaning business visits a customer’s home and their van rolls into their garage door when the handbrake isn’t correctly applied. The carpet cleaner is liable for the cost of fixing or replacing the garage door which he claims on his public liability insurance.
- During a storm, a large tree branch falls from a tree in a business carpark damaging two cars. The business uses their public liability insurance to pay the damage to the two cars.
- On a windy day, a commercial painter is spray painting the side of a building and the worker doesn’t realise there is fallout landing on the neighbouring business. The painter’s public liability policy is used to fix the damage to the next door’s premises.
Examples of What Isn’t Covered by Public Liability Insurance
Businesses often also need other forms of insurance to protect themselves from claims that aren't covered under public liability policy, for example:
- An employee falls off a ladder injuring their back. Their employer is required to hold a workers compensation policy to cover their medical costs and lost wages associated with the injury.
- A food manufacturing company is found to have sold spoiled food that leads to 50 people becoming ill. The claims of these ill customers are not covered by the manufacturer’s public liability insurance. Instead they require product liability insurance.
- An employee driving a company fleet car is involved in an accident that is deemed to be the employee’s fault. They have caused damage to another person’s car. Whilst using the company's vehicle the company will need to hold a commercial motor vehicle policy to cover any6 damages to their own vehicle or any third parties demands.
Coverage You Need
Some businesses are required to hold a public liability policy at a required level i.e. $5 million before they can begin work for a customer, sign a lease or apply for a government contract. Without adequate cover, your business is at risk of being made bankrupt by the cost of a claim. Even a minor injury can quickly grow to an expensive claim once legal costs are added on.
While businesses are not obligated to hold public liability insurance, it’s considered necessary if your business has any dealings with the public. Even home businesses that hold meetings with suppliers or customers on-site should consider public liability insurance.
Business Insurance Packages
Public liability can be purchased as a stand-alone policy or combined with product liability insurance. Because public liability insurance is purchased by so many businesses it is readily packaged with other types of business insurance that you may need.
A business insurance package can be tailored to meet the demands of your individual business. Your business package can include some of the following insurances - public liability, workers compensation, management liability, commercial motor, fire, theft, business interruption, glass, money, machinery breakdown, deterioration of stock, electronic equipment, general property and marine transit.
If you are unsure of the public liability risks your business faces, call one of our experienced business insurance consultants on 1300 656 001 to ensure you have the correct level of cover.