Public Liability - The Ultimate Guide

 Public Liability Insurance QLD: The Ultimate Guide

As a business owner, it's only fair to say that you take every precaution to protect yourself, your employees, and your business, but what about your customers, suppliers or members of the public? They could sustain an injury or damage to their personal property as a result of any negligent business activities, which could result in legal costs. Well, the good news is that you can take precautions to protect them, too — through Public Liability insurance. 

As a business professional, the insurance offerings to you are many and varied, so we have created the ultimate guide to Public Liability insurance in Queensland by answering the most frequently asked questions. We clarify exactly what Public Liability insurance is and demonstrate how vital it is for your business.  

What is Public Liability insurance?

Public Liability insurance is aptly named; it provides insurance to you for any liability you may face due to negligent business operations. Public Liability insurance is designed to provide protection for not only your business, but you also, in the event that a client, customer, supplier, or member of the public make a claim against you due to personal injury or property damage.  

Without Public Liability insurance, it is highly likely that, just as many other SME businesses have found, the financial ramifications of paying a claim and funding the associated legal fees would send you out of business. Can your business afford not to have Public Liability insurance? 

What does Public Liability insurance cover?

Typically, Public Liability insurance covers:

• Personal injury that has been suffered by a third party such as customers, suppliers or members of the public.
• Damage to any third party property as a direct result of your negligent business activities.
• Your defence (legal) costs associated with a covered claim. 
• In most cases, many policies will also provide cover for Product Liability.

What isn't covered under Public Liability insurance?

Under most policies, coverage is not offered for:

• Events that occurred before or after the policy period. 
• Professional negligence.
• Any costs associated with rectifying faulty workmanship (some policies provide limited amounts).
• Contractual Liability (unless negotiated in - unlikely these days).
• Damage to your own property.
• Injuries to your employees.

Do I need Public Liability insurance?

A need for insurance is present where there is a risk present; given that it would be nearly impossible to operate a business without some level of interaction with the public, customers, clients or suppliers, there is likely always going to be a potential risk to your business. That being said, Public Liability insurance isn't legally required in Australia for the majority of businesses, so in most cases, it would be at your discretion as a business owner whether to hold the cover or not. 

Some industries may stipulate mandatory insurance through a contractual obligation. An example of this may be where contractors and suppliers are not allowed on a construction site without first holding appropriate cover. 

Insurance Requirement Checklist

We have created a helpful checklist to identify if you might need a Public Liability insurance policy. You may require cover if any (or all) of the below apply to your business:

• Do you either sell and/or manufacture any type of product? For example, homewares, food items, clothing, artwork etc.
• Do you import, export or wholesale/retail products?
• Do you conduct your work at a client's home or on a client's premises? For example, a mobile hairdresser or tradesperson?
• Does your business participate in any public events? Examples could be local markets or industry-specific exhibitions. 
• Do you have anyone outside of your employees that visit your business premises? This could be a customer, supplier, vendor, or members of the public browsing. Bear in mind, this also extends to your home if you conduct any work from home, such as consultancy, health and wellness or beauty services. 

Top Tip: The above also applies if you operate as a sole trader. You do not need to be a big business to carry big risks. Even small business owners are legally responsible for creating a safe environment for third parties to conduct business with you. Public Liability insurance is popular with sole traders, and Hunter Broking Group works with many sole traders to find an appropriate solution for their Public Liability needs. 

How much Public Liability insurance do I need?  

Every business is different, therefore every business' Public Liability needs are different too. Often, insurers will offer different sums insured based on a set amount. These are usually around $10 million, $20 million and even $50 million. While these levels of cover may seem excessive, depending on the scale of injury sustained or property damage inflicted, Public Liability claims can rapidly escalate. 

The best place to start when thinking about how much cover you need is to consider what the risks are to your business: 

• Firstly: are you subject to any industry obligations or contractual requirements to hold a particular level of cover? It's common for businesses who work with contracts to have those contracts set out the minimum amount of Public Liability cover your business must hold to remain compliant with the terms of the contract. 
• Secondly: are you a part of a professional body or industry association? Do they require you to maintain a certain level of Public Liability insurance to maintain membership or meet a relevant industry licence requirement? 

At Hunter Broking Group, we partner with industry professionals in business risk management. Together, we help you identify the risks to your business then build a sound insurance risk management framework and strategy to assist in mitigating them. 

What will my Public Liability insurance premium be?

Your premium will depend on the amount and type of cover you need. If you are worried about whether you can afford Public Liability insurance, consider how you would afford to pay out a claim of potentially millions of dollars. We can help tailor an insurance strategy to suit your needs and financial situation, the main focus is that you are aware of what is and what isn't covered in each premium option.

Does Public Liability cover professional advice or services?

Public Liability cover is designed to provide compensation for a claim that arises due to personal injury or property damage to a third party caused by negligent business activity. It does not extend to losses incurred to the individual as a result of your professional advice or service. 

If a third party makes a claim due to losses incurred as a result of alleged (or actual) errors or negligence in your professional services or advice, then this would be more appropriate for a Professional Indemnity insurance policy. 

Often, Product Liability Insurance and Professional Indemnity Insurance work hand-in-hand. Consider our checklist above; what if you have clients visit your premises (or you visit their homes) in order to provide professional advice or services? Your business may benefit from holding Public Liability as well as Professional Indemnity cover. Hunter Broking Group can assist you with both!

Is Business Insurance the same as Public Liability?

There are many different insurances available to businesses. Which coverage types are applicable to your business depends entirely on, well, your business! Business Insurance usually refers to a total insurance package designed to provide cover for the contents of your business, such as tools and stock, against damage, theft, breakdown or business interruption (to name a few). Therefore, as it is commonly referred to, Business Insurance is not the same as Public Liability cover.  

Good to know: Some Public Liability insurance can be purchased as part of a Business Insurance package or as a stand-alone product. Hunter Broking Group has access to both, from an array of insurers and underwriting agencies!

How do I make a claim? 

In the unfortunate event that you need to make a Public Liability claim for your business, Hunter Broking Group will stand by your side and assist you through the process. We are experienced Insurance Brokers, not insurers, therefore, we work for you and provide our extensive claims knowledge to assist with your claims experience and outcome. We're in your corner the whole time!

Hunter Broking Group are highly experienced in the field of Public Liability Insurance within Queensland. Talk to us today to find out how we can assist you in building a solid risk management framework for your business and insurance liabilities or request a quote.

Disclaimer:

The information provided by Hunter Broking Group Pty Ltd on this website is for general information purposes only, and it is not a substitute for professional advice. You should always consider the PDS/Policy wording before making a decision. Coverage may differ based on specific clauses in individual policies. Refer to the FSG on our website or by requesting a copy for our services and remuneration details.