MORE and more business owners are coming to realize that public liability insurance is of utmost importance for their businesses. Despite all precautions, the naked truth is that accidents do happen. Hence, if a certain accident is a result of what your business has done, the parties involved, who can be a member of the public, a client or a contractor, can claim for compensation.
This is where public liability compensation comes in, covering your business in case of accidents, personal injuries or property damage. Statute laws enforce a certain “duty of care” on certain people, including but not limited to employers, suppliers of goods and property owners. If you accidentally breach your duty of care, you might be liable for damages.
Public Liability Insurance is available and can be used by individuals, non-commercial organisations, small businesses and large corporations. This kind of insurance provides legal protection to a wide range of operations, including shopping centres, home-based businesses, swimming pools, event centres or even carnivals. For some organisations and businesses, public liability insurance is mandatory. Even if in your case it is not mandatory, you can still greatly benefit of public liability insurance.
Why is Public Liability Insurance so Useful?
Without this type of insurance, you may find yourself unable to afford the huge costs usually associated with paying damages or defending a claim. In case a claim is being made against your business, public liability insurance will cover all expenses and costs associated with the claim. If you run a business that interacts with many public people, PL insurance is of utmost importance.
No matter what the circumstances, PL insurance can help protect any small business. If your company causes serious injury to an important member of the public, you might be sued for breach of duty or negligence. With PL insurance, you will have the peace of mind your company and your personal interests are not threatened. Moreover, you are protected from court cases or penalties of any kind.
If someone is injured and sues your business, the PL insurance policy will provide all coverage costs needed, such as legal fees, damage, medical treatment for the injury and other expenses. Without this policy, you as the business owner will be responsible for paying the total amount of the claim. Worst case scenario, if the claim cannot be paid out of your own PL insurance funds, the court will turn to your company’s assets. This might be the end of your business as you know it.
While cutting costs might be a clever way to increase your company’s profits, cutting corners with PL insurance is certainly not recommended. You need your business to be completely covered in case an unexpected accident happens. If you are still not convinced that public liability insurance is the best option you have, you need to realize that PL covers 3rd party property damage. Let’s say that one of your teams have damaged one of your client’s properties whilst conducting some work. They leaned against a wall and knocked it down. Now, the fact that this wall was not secure is no one’s concern. You are the one responsible for its repair — after all, the owner of that wall can lie that the wall was perfectly fine. One of these simple accidents can cost up to 20,000 AUD or even more.
How Bad can it Get?
It can get very bad. There was a case a few years ago that demonstrate this, where a reputable London photographer was working for a Local Authority. As he was taking some pictures of the city mayor shaking hands with some important public figures, he accidentally slipped and knocked down an old lady who was standing next to him on the pavement. This terrible accident left her with severe brain damage, so she now requires 24/7 care. The business owner was taken to court and had to pay a huge amount of £3.1 million in damages to the family of the victim. Fortunately, he had £5 million public liability cover, so he didn’t have to pay a penny.
The above case happened in UK a few years ago. There are also hundreds of similar cases all around the world, including Australia. Hence the importance of having public liability insurance as a small company.
Other Examples of Public Liability Claims
In the world we live in, every single one of us is prone to making mistakes. For example, a drama teacher who arranges a class for the next drama play accidentally spills some water and forgets to mop up. A child slips, hits his forehead and then is taken to the hospital. The teacher is then responsible for paying his hospitalization.
Another common example is when an engineer comes to visit a site of one of his clients and sets up his measuring equipment. All of a sudden, a child comes in the area and falls over the measuring equipment. In almost all the cases, the public liability claim is taken against the engineer.
What Level of Cover do you need?
There is a wide range of packages available from several insurance companies such as AIG, QBE, Calliden Group or Lumley Insurance. However, one of the most reliable and experienced in this field is Allianz. In case you are working in restaurants, hotels, in a shopping centre or for a local authority, you should choose the $20 million option. For starters, you might also go with the standard $10 million Limit of Indemnity.
The selected Limit of Indemnity covers your small business in case you become legally liable to take money out of your pocket to pay compensation for property damage or personal injury.
Personal injury to third parties includes false arrest, death, disability, mental injury, assault, wrongful eviction, slander or defamation. On the other hand, property damage includes physical destruction of a property or of any other asset or the loss of use of a property that cannot be used anymore due to physical damage.
With PL insurance from Allianz, you get the peace of mind that your business is well protected and your funds will not be used in vain. Act today and be protected for any accidents that might happen.
About the author:
Jane Jibs is an insurance consultant from Melbourne, Australia.