What Is Public Liability Insurance? | BizCover Modules

Public liability insurance is one of the most common types of insurances that businesses need. It's for claims made against you, your business and your employees due to injury caused to someone or damaged cause to another person's property as a result of your business activities. That someone could be a customer, supplier or even a member of the public but not an employee as they would be covered under workers' compensation. Policies also include product liability to protect you against liability claims from the products you sell. In public liability insurance, your work is your product. You need it if your customers come to you and if you go out and about to see them. In fact, almost every business needs it because accidents can happen It could be as simple as a customer slipping over on your floor, you spill a drink on someone's laptop or damage caused by installing faulty equipment. Claims made against your business can be expensive and if you're found negligent, it's you that has to pay. Except if you have public liability insurance, your policy pays, not you. Put simply, your policy covers legal and defence costs, compensation for personal injury and compensation for property damage. So having it means your business won't come tumbling down, even if somebody else does. It's compulsory for some types of businesses and in most cases, even your landlord will require you to have it. If you're not convinced you need public liability insurance, here's a story of how a graphic design business was saved from having to fork out a huge sum in costs and compensation when what seemed like a small accident occurred on their premises. A customer walked into their office and fell down a small dip, sustaining a hairline fracture and ligament damage to their foot. The customer commenced legal proceedings against the business, claiming for the cost of medical treatment as well as loss of income whilst they were unable to work. The insurer appointed assessors to fully investigate the claim as it sounded suspicious and also appointed a law firm to act on behalf of the business. In the end, the customer's injuries and inability to work were verified and the customer was awarded $45,000 in compensation for their medical costs and loss of income. The whole process took three months to finalise and the insurer also paid out $30,000 for the costs incurred for the assessors and lawyers. All of the costs, including the compensation payment, were covered under the graphic design company's public liability policy.