What is a Public Liability Insurance Risk?

As a business owner you are accountable to third parties that come into contact with your business (customers, employees, suppliers, etc.). If damage or an accident occurs while you’re providing a service, a third party can sue your business, which can result in costly legal fees as well as the obligation to pay for the damage or injury you may have caused.

These costs are often devastating for businesses, which is why Public Liability Insurance exists to help protect you in the event of an incident. Whilst many businesses ensure that all due care and responsibility is granted, accidents do happen. Even where the incident is not the fault of the business, they may be dragged into a claim due to association of interests (e.g. A contractor causes a loss or injury so the blame is levelled at you as the principal) where you need to defend yourself in the courts.

Public Liability is an insurance class that has been known under different terms such as general liability, Broadform liability, legal liability and products liability, to name a few.

When tailored to suit a business, public liability will cover areas such as import liability (if a product is imported by the insured directly from another country, then that business may find itself to be the ‘deemed manufacturer’ of that product and any claim may be bought about under the laws of that State or Territory or Commonwealth). It can also be extended to cover exporting of goods, goods sold, pollution liability, statutory liability, goods in the insured’s care, custody or control among other extensions where necessary.

The current sum insured trend for sums insured under a liability policy stands at $10 million although $20 million is becoming common and preferred by many large national and multi national companies. $50 million or even $100 Million cover may also be warranted by some.

IMPORTANT – If your business requires that you sign contracts before undertaking any work, you must advise our office immediately (prior to signing) as there may be clauses that mean you may sign away any rights in relation to insurance. In short, this may mean that you are signing away the insurers rights and therefore any claim may be rejected.