Public liability – Explained

Public liability refers to a claim made by the public who comes in contact with business activities. Public liability insurance covers legal expenses and compensation for claims brought against your business by customers, clients, or any member of the public. It covers personal injuries, losses, damage, death and other incidents that occur on a business property only. It has to be borne in mind that public liability Penrith does not cover any claims made by employees made in the workplace.

How does public liability insurance work?

Businesses that frequently have customers visiting their premises tend to be at a higher risk of litigation. This is because there is a possibility that a customer might slip and fall or that their property, for instance, bags, might get harmed as a result of business services. While you may have signs put up for some imminent dangers, such as wet floors, you still might end up getting sued. 

Litigation means hefty legal fees, even when you eventually win the case. It is in these instances that public liability insurance kicks in and covers costs of:

Bodily Injury

If a visitor or customer gets injured on your business premises, they might sue you for medical expenses and seek compensation for the damage caused to them. 

Property Damage

If on their visit to your business premises, a customer or visitors’ property such as a handbag or some other item gets damaged, they might consider suing you for the damage caused. For instance, if an employee accidentally spills coffee on a customer’s bag, the customer could take you to court for damages. In this case,public liability insurance in Penrith would be required to cover costs. 

Legal expenses

All litigation and court procedures require hiring lawyers and consultants, which incurs expenses. Even when you win a case, the company has to pay lawyer’s fees and other legal expenses, which public liability insurance covers.

Is public liability insurance required?

In Australia, certain trades are granted a license only after public liability insurance cover is obtained. However, in some cases, it can be useful to have. Whether you are an SME or a large-scale business, information about public liability is essential because there are certain aspects of the business that the insurance does not cover. For instance, it is important to understand that public liability insurance in Penrith only covers the incidents that happen within your business premises. If you or your employees are interacting with customers outside of your business premises, and an eventuality happens, the public liability insurance will not cover expenses for it. Therefore, while public liability insurance is affordable and useful for businesses that have visitors and customers coming into their physical spaces, its limited coverage might not be suitable for all kinds of businesses.

Differences to remember between public liability and professional indemnity

It is important to note that public liability and professional indemnity insurance are two different policies. Professional indemnity covers the expenses for claims of a financial loss made by customers who indicate that your professional or specialist service was the reason for the loss. On the other hand, public liability helps pay for the injuries or damages caused on your property. When choosing the insurance cover to go for, it is important to keep in mind exactly what you are requesting in terms of cover and the caveats that exist in the policy. 

What are the aspects that public liability insurance does not cover?

Public liability insurance excludes certain claims from the policy, and you should bear these in mind when getting insured. These exclusions are:

Punitive damages, which are penalties that might need to be paid on top of the compensation ordered by the court

The damages to the business property that you own are not covered under public liability insurance

Cyber-attack damages faced by the business are not covered

Slander or defamation allegations that are brought against your business are not covered under public liability insurance

Public liability  insurance Penrith can be bought as a stand-alone policy, or it can be a part of your overarching business insurance policy. If you are not purchasing an overall business insurance policy, then it is advisable to consider other insurance policies that you might need to purchase to operate your business. If you are a professional such as a dentist or an accountant, you might need professional indemnity insurance to protect yourself against customers who claim that they suffered losses because of your advice. You can also purchase business insurance to cover damage to your property and its contents. It has become common for businesses to be exposed to internet-based risks because of the increased use of e-commerce platforms as well as social media to reach wider audiences through the internet. Claims can be made by online customers and these are not covered by public liability insurance because there is no physical property involved in the transaction. Such claims can be covered by and mitigated through the use of Cyber insurance.  Cyber insurance can protect against claims made for data breaches of sensitive customer information that can be the cause of losses to customers. 

There are many different kinds of insurance that businesses need to purchase, and it is always advisable to consult professionals before opting for public liability insurance so that you can be sure of whether it will be of any value to you.  

Disclaimer: This is a generic Information & post; content about the services can be changed from time to time as per your requirements and contract. To get the latest and updated information, contact us today or visit our website.