Public Liability Insurance explained
Business owners in Australia have a duty of care to keep those that come into contact with their business safe.
If a financial claim for injury or damage is made against you this is what Public Liability Insurance is for.
Public Liability Insurance can help cover compensation & legal fees if a customer, member of the public or other business makes a claim against you for personal injury or other damages.
Lets take a typical cafe as an example. You have several people and businesses you need to provide a safe place for. Your coffee suppliers who visit you at your cafe, your customers buying food and coffee, anyone in contact with your business can make a claim.
What businesses could be exposed to a Public Liability claim
As a business owner, you know you have to look after your employees. On top of that, you also have a responsibility to look after your customers, suppliers and anyone else involved in the business. If you don’t, you could find yourself having to pay off some pretty expensive legal fees and damages if you’re sued for negligence. That’s where Public Liability insurance could help.
Should I get Public Liability Insurance
If you do any of the following you should consider public liability insurance.
- You your employees work with clients or suppliers in public spaces
- You or your employees visit sites owned by others
- You or your employees deal with visitors on a site owned by you
- You or your employees manufacture products or goods
Who can bring a public liability claim
Anyone who claims you have been negligent during your business activities that has caused
- injury or death of a third party
- damage to a third parties property
What doesnt Public Liability Insurance typically cover
You should read the exclusions on all insurance policies.
Typical exclusions for public liability insurance would be.
- injury to your own workers (typically covered by Workers Compensation Insurance)
- incidents involving asbestos
- punitive damages, if a court decides you have been exceedingly negligent you may face further damages
- pollution that is deemed gradual in nature e.g. leaking pipes or storage tanks
- product recalls
- professional services or advice (typically covered by Professional Indemnity Insurance)
What factors could affect my public liability insurance premiums
Claims history, business location & type of business are all relevant factors affecting premiums.
For example an adventure sports business will not have the same risks as an electrician. Some businesses will require a higher level of cover and therefore may pay a higher premium.
What does Public Liability Insurance cost
Cost very much depends on the type and size of the business you run.
You could pay as little as $300 per year for a small business with little risk to several thousand a year for a larger business with more public liability risk.
Is Public Liability Insurance compulsory in Australia
The short answer is no.
However some business associations or trades have mandatory public liability insurance requirements.
Do sole traders or contractors require Public Liability Insurance
If you do not have public liability insurance and a claim is made against you, you could be required to cover the financial damages awarded and legal costs yourself.
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